Unilever, the company behind brands including Marmite and Dove soap, will continue increasing prices for consumers this year after higher price tags on detergents, soaps and packaged food helped the company beat sales forecasts for 2022.
The London-headquartered company warned that “underlying price growth would remain high” in the first half of the year, and that it expected consumers to buy fewer items as a result.
It comes as the consumer goods giant – which also owns Hellmann’s mayonnaise, Magnum and Ben & Jerry’s ice-cream – tries to recoup its own rising costs, including ingredients for its products, which soared as the result of surging energy costs linked to Russia’s invasion of Ukraine.
Unilever said it was likely to sell more items once price rises started to ease, but warned it was “too early to say” whether that would result in positive growth in the volume of sales in the second half of the year. Overall, it is expecting underlying sales growth of at least 3%-5% for the full year.
The forecasts come after Unilever reported underlying sales growth of 9% for 2022, higher than the 8.2% increase that analysts had expected. Unilever said the strong performance was “driven by disciplined pricing action in response to high input cost inflation” in the middle of challenging economic conditions.
It followed an 11.3% rise in the prices of its goods over 2022, though the volume of sales fell 2.1%, suggesting consumers were put off by the higher prices and bought fewer goods.
The company’s home care division – which includes Domestos bleach – was one of its strongest performers, recording a 12.3% rise in sales, after price increases for fabric cleaners which experienced the largest increase in input costs.
Unilever insisted that “it carefully balanced price growth, volume and competitiveness” to navigate surging inflation last year. It helped the company report 14.5% rise in overall turnover to €60bn (£53bn), though annual operating profit only grew 0.5% to €9.7bn.
The chief executive, Alan Jope, who will leave the company in the summer, said the company was making progress in its corporate turnaround. “There is more to do, but the changes we have made mean that we start 2023 with momentum, setting us up well for delivering another year of higher growth, which remains our first priority,” he added.
Marmite and Dove maker Unilever warns of more price rises this year