Coffee pod sales slip amid return to offices

WORKERS returning to offices across Europe have dented demand for Nespresso coffee pods in the region.

Nespresso sales in Europe slipped in the first six months of the year, with parent company Nestlé blaming strong sales last year, when a lockdown-driven boom in at-home coffee drinking pushed Nestlé to its fastest quarterly sales growth in a decade. That proved tough to match as people began spending less time at home.

Official guidance for remote working only changed in the UK last summer, when the Government said staff should gradually start returning to city centre offices. Since then, footfall in office hubs has been on the rise. Data compiled by Bloomberg using Pret a Manger figures suggested London City footfall hit 89pc of 2019 levels in May.

Nestlé said sales of its coffee capsules globally ticked 1pc higher in the six months to the end of June, but only because of major growth in North America.

Nestlé raised prices of the capsules by 4.2pc in the first six months of the year.

Overall, the company raised prices across its product range – which also includes Kit Kat and Purina pet food – by 6.5pc in the first half of the year.

Chief executive Mark Schneider said sales volumes hadn’t been affected by the higher prices, saying: “Volume and product mix were resilient.”

Sales across the business rose by 9.2pc to hit 45.6bn Swiss francs (£39bn), and profits were up 6pc, although Nestlé said its margins took a hit due to “time delays between cost inflation and pricing actions”.

The company said the cost of raw materials, packaging and logistics all rose over the period.

Figures from the British Retail Consortium this week showed food prices had risen 7pc over the past year – something it blamed largely on “exorbitant land transport costs”.