Consumer goods giant Unilever has upped its sales guidance as it passes on rising costs to customers around the world.
The business said that the cost of what it buys will increase by billions of pounds this year but it is solving this pressure by putting up prices.
Even as this happens people have not abandoned the company’s products in major numbers.
The business owns Marmite, Magnum, Vaseline, Pot Noodle, Dove soap and many other brands.
In the past Unilever had expected underlying sales to rise by between 4.5% and 6.5% this year but is now expecting this to be higher as it passes on costs.
Chief financial officer Graeme Pitkethly said that Unilever has hiked prices enough to offset around 70% to 75% of the increases in its costs. They have further to go to catch up with the full cost rises.
On a call with reporters on Tuesday morning, he said that price hikes have lagged behind in the UK. Increases have been faster in the developing world than in Europe, he added.
The business expects a £3.9bn hit from inflation this year.
“Unilever has delivered a first-half performance which builds on our momentum of 2021 despite the challenges of high inflation and slower global growth,” said chief executive Alan Jope.
The business said that turnover reached £25.1bn in the first half of the year, a rise of 14.9%.
Meanwhile, the higher prices were not enough to turn customers away in serious numbers although the company’s ice cream business is losing some sales. Volumes across Unilever – which measure the number of products that the company sells rather than the amount it sells them for – dropped 1.6%.
The company, which counts hundreds of well-known consumer brands in its portfolio, said it had started to ramp up advertising to help these products.
It warned that the outlook for how much costs might go up is “uncertain and volatile”.
But the company promised investors that it will continue to grow and improve the amount of profit it makes in every sale. It will do so by increasing prices for customers and saving money, among other things.
It comes as consumers around the world face massive hits to their bank accounts. Inflation is rampant and ran at 9.4% in the year to June in the UK.
This means that for every £100 that someone spent a year ago, they will need to spend more than £109 to buy the same items.
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