British consumer group Unilever on Thursday warned that it expected prices to remain high into next year as decades-high inflation takes time to come down.
“The global macroeconomic outlook remains mixed, and we expect the challenges of high inflation to persist in 2023,” Unilever’s outgoing chief executive Alan Jope said in a statement.
The group whose brands include Magnum ice cream, Cif surface cleaner and Dove soap, revealed an 18-percent jump in group revenue during the third quarter as it passed on higher prices to consumers.
Later in a conference call, Jope said “making price increases is not easy and we’re very mindful of the pressure that this puts on consumers”.
He said prices had to be lifted “simply to protect” Unilever’s ability to invest in its brands.
Jope — who this year came under fierce criticism from investor activists over a failed takeover bid — is set to depart Unilever at the end of 2023 after five years as CEO and nearly four decades at the company, it announced last month.
Unilever sales grew to 15.8 billion euros (dollars) in the July-September period compared with the third quarter last year, it said Thursday.
Prices of its products grew 12.5 percent on average, impacting sales volumes which dipped 1.6 percent.
“As the cost-of-living screws are turned tighter and recession bites, risks that shoppers will drift away to cheaper brands are rising, with volumes already under pressure,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Jope meanwhile leaves after Unilever’s recent failed $50-billion bid for the former health care unit of drugmaker GlaxoSmithKline.
In response, he slashed around 1,500 management jobs worldwide in a major restructure of the company, seen as a bid to appease unhappy investors.
Under Jope, Unilever became a wholly British company at the end of 2020 after it completed a merger of its Dutch and British corporate entities.