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Bloomberg
Unilever Plc is increasing the pressure on consumers worldwide with higher prices for Dove soap, raising the risk that shoppers may start to balk at spending more.
All company reported sales growth at about double the pace analysts had expected. Unilever forecast full-year revenue growth at the top end of its forecast, though warned that profitability may suffer as consumers cut back on purchases.
Consumer-goods makers are walking a tightrope as the war in Ukraine exacerbates a surge in transport, packaging and
raw material costs and simultaneously squeezes household budgets that are straining with higher energy prices. Their dilemma is that they need to raise prices, but if they do too much, consumers will switch to cheaper products.
Unilever shares rose as much as 1.6% in London.
Unilever has so far covered about two-thirds of the cost increases it’s facing with price hikes, Chief Financial Officer Graeme Pitkethly said on a call with analysts.
Unilever is one of the few major European consumer-goods companies that has already been reporting a decline in shipments, even though the drop was less than expected in the first quarter. Nestle SA has said it doesn’t yet see signs of shoppers switching to cheaper products, though that will probably start later this year, impacting volumes.