Nestle warns that commodity prices are likely to remain high

The maker of KitKat chocolate bars, Nescafe coffee and Perrier water, also warned of weakening consumer sentiment.

The Swiss company, which has 1,800 staff based in York, said it was satisfied with its UK performance during the first nine months of the year.

Paul Grimwood, chairman and chief executive of Nestle UK & Ireland, said: “The economy remains difficult, very challenging and unlikely to improve in the near future.

“There is a noticeable change in how shoppers are spending their money. There is more consideration on how and what they buy as disposable income goes down and cost of living goes up.”

He added that Nestle UK will be mindful of what its consumers are going through and will keep a tight control on costs.

“Overall, the business is growing market share in the majority of categories and this is a good measure of our effectiveness in a challenging market place,” said Mr Grimwood, who is part-based in York.

He added that the group has introduced a number of new recipes and products that are working well.

“Nescafe Gold Blend has been relaunched with a new taste and jar supported by extensive media campaign. Early results suggest it has been well received by consumers reflected by uplift in sales,” he said.

The company reported strong confectionery sales. Rowntree’s rose by 22 per cent, Aero was up 16 per cent and Rolo sales rose 28 per cent.

Instant coffee sales were boosted by Super Premium ranges, which rose 4.2 per cent, and the cafe style range, which rose 8.5 per cent.

Underlying nine-month sales rose 7.3 per cent, compared with a forecast for 7.1 per cent and down from 7.5 per cent in the first half.

Analysts said price hikes and strong demand in emerging markets allowed Nestle, like other big European food groups, to make up for weakening consumer sentiment in mature markets in western Europe and the US.

Nestle achieved volume growth of 4.1 per cent and raised prices by 3.2 per cent between January and September.

It said the underlying sales growth contribution was more weighted to pricing as the year progressed.

Emerging markets remained the growth driver with 13.1 per cent underlying sales growth, and there is no sign of a slowdown in these markets, including in China.

Developed markets were more challenging, with growth of four per cent.

Water sales were affected by unfavourable weather in Europe with a flat volume growth in the third quarter.