Household product maker Unilever raised prices once again, warning that inflation is about to get a whole lot higher later this year.
The maker of Hellman’s mayonnaise and Dove soap warned of further price hikes for its products, as it looks to pass higher input costs onto consumers despite already raising product prices 8% year-over-year in the final quarter of 2021. The UK-based company once again hiked prices 8.3% in the first three months of the year, as the conflict in Ukraine is expected to boost raw material inflation by €2.7bn come the second half of the year.
The latest figures are a substantial increase from the forecast of €1.5bn at the start of the first quarter, and on top of the cost push inflation of approximately €2.1bn already materializing in the first half of 2022 as grains, oils, and other agricultural commodities undergo price rallies. “While we’re acutely aware of the pressure on consumers, we believe that increasing prices in response to this extreme commodity cost pressure is the right thing to do,” said Unilver CEO Alan Jope.
Unilever’s home care category saw some of the sharpest price increases, with goods such as Cif cleaners and Sunlight dish soap jumping 12.5%, causing sales volumes to slump 2.9%, while beauty and personal care products increased 7.4%. The substantially large price hikes forced some consumers to tighten the grip on their pocketbooks and revert to cheaper, own-brand product options, which became evident when Unilever reported an overall 1% decline in sales volumes.
In an effort to refrain from passing on the full impact of inflation onto consumers, Unilever also decided to substitute certain ingredients— such as oils— for cheaper alternatives, as cooking oils have been particularly impacted by the crisis in Ukraine.
Information for this briefing was found via Unilever. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
