Makers of goods from chocolate bars and coffee to lawnmowers and industrial robots succeeded in passing on soaring costs to consumers, first-quarter earnings showed this week, allaying fears higher prices could dent demand for their products.
Some of Europe's biggest companies reported first-quarter sales increases, with KitKat maker Nestlé, Evian water owner Danone and Dulux paint maker Akzo Nobel saying they made the gains while raising their prices.
Engineering company ABB and gardening equipment maker Husqvarna also reported strong demand despite both increasing prices.
“Pricing power does exist. Across multiple categories. In European food, it is called Nestlé,” said Bernstein analyst Bruno Monteyne.
Outside Europe, Tesla surged past Wall Street expectations on Wednesday as higher prices helped insulate the electric vehicle maker from supply chain chaos and rising costs.
But while cheering investors, the strategy is stirring worries about households' ability to cope and the outlook for the rest of the year.
Rising interest rates and lagging pay deals are squeezing consumers, who are seeing their disposable incomes shrink and shopping bills rise.
Nescafé owner Nestlé was among the winners on Thursday, reporting a 7.6% rise in organic sales during the first three months of the year, but its CEO later warned that inflation has made its profit margin target more challenging.
“We stepped up pricing in a responsible manner and saw sustained consumer demand,” said the Swiss company, whose products include Purina pet food and Nespresso.
The world's biggest food group said the price rises were unlikely to be the last.
French peer Danone, whose product line up includes Activia yoghurt and Evian water, said it was also ready for further rounds of price increases “if needed” after reporting a 7.1% sales increase on Wednesday.
The world's biggest yoghurt maker benefited from price increases at the start of the year as well as easier comparisons and stronger demand for baby formula in China.
Price rises have also not hurt demand for Dutch paint and coatings maker Akzo Nobel, which beat quarterly core earnings estimates on Thursday while reporting a 17% increase in prices compared with a year earlier.
Beyond the consumer area, factory robots and industrial drive maker ABB reported a 21% jump in orders during its first quarter despite increasing prices.
CEO Bjorn Rosengren said there were was no end in sight to price increases for components and metals, as well as rising transport costs.
“We are not the only one lifting prices, everyone is doing that in the market. That is the new reality.”
Also on Thursday, Husqvarna, the world's biggest maker of gardening power equipment, said it was raising prices further this month in response to rising supply and energy costs.
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