* Nestle and P&G beat, Unilever meets analysts' forecasts
* Volume picks up but pricing slows
* Nestle shares up, Unilever and P&G down (Adds comments from P&G CEO, Unilever CFO, background on rising freight costs; updates shares)
By Silke Koltrowitz, Martinne Geller and Richa Naidu
ZURICH/LONDON/CHICAGO, April 19 (Reuters) - Quarterly sales growth at Nestle, Procter & Gamble and Unilever was driven almost entirely by shifting more goods, in a stark illustration of how hard it is for consumer products makers to raise prices in a competitive retail environment.
Multinational makers of everything from soup to soap are under pressure to boost revenues as consumers flock to fresher products and newer brands. The large retailers they sell through face their own pressure to keep prices down, as they battle new competition from drugstores and Amazon.com.
The result has been mounting tension, which recently erupted in a clash between Nestle and European retailers that saw some of the Swiss company's goods briefly taken off store shelves. That row was itself an echo of a 2016 standoff between Unilever and British supermarket giant Tesco.
On Thursday, results from both European manufacturers suggested those tensions remain high. Nestle's 2.8-percent underlying sales growth only got a 0.2 percent boost from higher prices, and Unilever's 3.4 percent growth just a 0.1 percent lift. nL8N1RW0Q4]
"We expect chronically weak pricing from both Unilever and Nestle to play to the market's fears of weak pricing power, fueled by channel shift, in the face of rising commodities (prices)," Jefferies analyst Martin Deboo said.
The pricing pressure was even tougher for Procter & Gamble , the world's largest consumer goods maker, which on Thursday reported a disappointing 1-percent rise in third-quarter organic sales as lower prices offset a 2-percent rise in the volume of goods moved.
"What is clear is what it takes to win has gotten more difficult," P&G Chief Executive David Taylor said on a post-earnings call.
The maker of Gillette razors, which said sales would continue to hurt from pricing in the fourth quarter, flagged higher transportation costs in addition to pressure from struggling retailers and rising commodities prices.
Railroads and truck fleets have raised prices amid a shortage of drivers, reduced capacity, higher fuel prices and a strengthening U.S. economy.
"I think everybody is feeling this a little bit," Unilever Finance Chief Graeme Pitkethly said, predicting that industrywide freight costs in the U.S. could rise by a high single-digit to double digit rate.
P&G and Unilever shares fell more than 2 percent, while Nestle's were up 0.2 percent. Nestle investors looked past the pricing issue at the Swiss food giant to the fact its overall sales exceeded expectations after several disappointing quarters.
That beat, and a pick-up in volume, is welcome news for Nestle's new CEO Mark Schneider, who took the top job at the maker of KitKat chocolate bars and Maggi soups in 2017 with the mission to return it to solid growth after six years of decline.
Schneider said underlying growth would improve during 2018.
"The mood of European consumers is proving to be rather less optimistic in the first quarter of 2018 than at the end of last year," the group said on Thursday. "In France and Austria, in particular, the euphoria appears to have diminished temporarily in the wake of the elections."
Consumer goods makers and retailers are always in complex negotiations around pricing and promotions to suit their ambitions. If a manufacturer wants to take market share, it might discount; alternately, it may seek price increases to boost margins.
Russ Mould, investment director at AJ Bell, said trends suggested Unilever and some of its peers had "blinked a little" on pricing due to growing competition, even though they represent powerful, established brands.
"Brands are still a vital part of any company's pricing power armoury but ... some companies are stronger in the food chain than others, depending on size, route to market and the availability of alternatives," Mould said.
This is Unilever's second quarter of volume-led sales growth, after several quarters fueled by pricing. CFO Pitkethly said the earlier price rises, and corresponding weak volume, were partly due to currency-related inflationary pressures in certain markets that have since abated, giving consumers more confidence to spend on everyday items.
As a result, sales volume in emerging markets, where Unilever does the majority of its sales, was ahead of expectations, according to Barclays analysts.
"The good news is when you have more muted pricing, more consumers buy more of your brands," Pitkethly said, adding that minimal commodity price inflation had also inhibited the ability to raise prices.
He said the main pricing trouble spots were Brazil and Indonesia, which both saw prices fall due to weak consumer sentiment; India, due to a tax change put through last year; and Britain, where retail competition is fierce.
These four countries make up 25 percent of Unilever's sales, Pitkethly said. Other countries, such as Turkey and Mexico, saw a good balance, he said.
The overall balance of price and volume would improve in the second half of the year, Pitkethly said. P&G CFO Jon Moeller also said he expects pricing pressures to ease later this year.
All three companies confirmed their sales guidance for the year, with Nestle aiming for 2 percent to 4 percent underlying sales growth, Unilever looking for 3 to 5 percent growth and P&G saying organic sales would be at the lower end of its 2 to 3 percent range.
Unilever said growth in the second quarter would be near the lower end of the range. Nestle also said it was on track to return to mid-single-digit underlying sales growth by 2020.
($1 = 0.9687 Swiss francs)
($1 = 0.8075 euros)
Editing by Mark Potter and Nick Zieminski