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Unilever warns of further price rises as costs keep climbing

Unilever said underlying sales rose 5.8% in the second quarter, but it expects underlying price growth to accelerate in the second half as commodity-driven pricing hits markets.

Reported · Written up by our desk · Europe

Unilever warned it will push through further price rises over the coming months as it works to recoup growing costs tied to commodities and services. The company said the pace of price increases slowed in the second quarter, helped by temporary factors including World Cup related discounts and competitive efforts in Brazil, but those effects would not protect consumers for long.

In remarks to shareholders, Unilever said it expects underlying price growth to accelerate in the second half as commodity-driven pricing continues to land in markets. The Guardian Business reports the outlook leaves the company exposed to whether shoppers continue to buy its branded products rather than trade down.

Unilever reported underlying sales up 5.8% in the second quarter, with turnover rising 3.8% to €13bn. The company pointed to continued demand for its branded portfolio, including Marmite, Dove, and Hellmann’s.

The report also links parts of Unilever’s cost pressure to higher oil prices since March, describing how disruptions to tanker traffic through the Strait of Hormuz had weighed on manufacturer input costs. While oil prices have fluctuated with temporary ceasefires, the company’s concern is that a sustained drop has not yet arrived, leaving producers to seek to pass costs on to customers.

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