Unilever Plc raised its sales forecast this year as it pushed through record price rises to consumers amid rampant inflation. The maker of Knorr stock cubes now expects sales this fiscal year to increase more than 8 per cent, up from a prior range of 4.5 per cent to 6.5 per cent. However, the group said volumes are falling in a sign that cash-strapped shoppers are starting to cut back on essential spending.
Higher prices pushed the Anglo-Dutch group’s comparable sales up 10.6 per cent to €15.8 billion ($15.9 billion) in the third quarter, beating analyst expectations of a 8.6 per cent increase. It increased prices 12.5 per cent during the period, the highest price increase on record which dented volumes. It expects further falls in volume during the final quarter as consumers trade down to cheaper supermarket brands.
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Unilever, whose Chief Executive Officer Alan Jope will step down next year, said the global macroeconomic outlook remained mixed and it expected high inflation to persist in 2023. Still, it retained its forecast for an underlying operating margin of 16 per cent this year and expects it to grow further in 2023 and 2024, through pricing, consumers switching to more premium products and cost cutting.
Nestle SA, the world’s biggest food retailer, also said last week that inflation will remain an issue next year and shoppers should brace for more price increases. Mark Schneider, CEO of the maker of Nescafe and Maggi stock cubes, said consumer goods companies are facing huge upward pressure on energy, transportation costs and commodities. The Swiss maker reported a small drop in the volume of goods it sold in the third quarter too after raising prices 9.5 per cent.