Consumer goods giant Unilever, whose brands include Marmite, Dove soap and Ben & Jerry’s ice cream, has warned of further price rise today (28) saying input costs have “further accelerated” through the first three months of the year.
Unilever has already raised prices by over 8 percent year-on-year in the last quarter.
With the Ukraine war driving up raw material inflation, Unilever now expects its costs in the second half of this year to rise by £ 2.27 billion. That’s up from a forecast of £ 1.2 billion three months ago, and on top of input cost inflation of around £ 1.7 billion in the first half.
CEO Alan Jope revealed that the company is navigating “unprecedented cost inflation”.
“This period of unprecedented inflation requires us to take further pricing action with some impact on volume as a result,” Jope said.
“Underlying sales growth of 7.3 percent was driven by strong pricing, with a limited impact on volume in the quarter.
This performance was delivered against the backdrop of significant rises in input costs that have further accelerated through the first three months of the year, and the human tragedy of the war in Ukraine, reports said.
While prices soared 8.3 percent, sales volumes were down 1 percent- suggesting consumers have sought out cheaper options as inflation hit household budgets.
Unilever now expects full-year underlying sales growth to be towards the top end of its 4.5-6.5 percent guidance range, but the full-year underlying operating profit margin could be the bottom end of its 16-17 percent range.
Unilever’s declaration comes amid reports that supermarket chain Sainsbury’s is also seeing the impact of rising costs.
The supermarket has warned shareholders that profits this year will be hit by soaring inflation and a fall in customers’ disposable incomes.
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