Unilever hits shoppers with big price hikes as it drives up the cost of everyday items from Hellmann’s mayonnaise to Dove soap
Unilever has hit shoppers with its biggest price hike ever as it drives up the cost of everyday items from Hellmann’s mayonnaise to Dove soap.
In a painful blow to millions of families, the consumer goods giant has increased prices by 12.5 percent in the three months to the end of September.
The move underlined the magnitude of inflation raging through the economy, affecting both households and businesses. Inflation in the UK is at a 40-year high of 10.1 percent, sparking a series of interest rate hikes by the Bank of England that have pushed up mortgage costs.
Unilever, whose brands also include Marmite, Ben & Jerry’s, Persil and Domestos, is facing rising operating costs, including utility bills, transportation and wages.
It expects the rising cost of doing business to reach £4 billion this year. And as a sign of more misery for shoppers to come, it expects inflationary pressures to continue and is bracing for another £1.7 billion hit in the first half of 2023.
But it turns out that shoppers are looking for cheaper alternatives now that Unilever is raising prices. The volume of goods sold by Unilever fell by 1.6 percent in the third quarter.
Finance chief Graeme Pitkethly said rising food and energy bills are driving consumers to cut back on non-essential items. Unilever shares fell 0.1 percent, or 4p, to 3865p.
But despite shoppers cutting back, Unilever’s price increases helped total sales by 10.6 per cent to £13.7 billion, the fastest growth it has seen in a decade.
Unilever is just the latest consumer goods company to reveal massive price increases. On Wednesday, Reckitt Benckiser, whose brands include Durex and Nurofen, said it had pushed up its own prices by about 10 percent.