Unilever has given a dire assessment of consumer sentiment in Europe and China – two of its key markets – but raised its full-year sales forecast as it lifted prices to counter soaring costs.
Like the rest of the consumer goods industry, Unilever’s margins have been squeezed since the start of the war in Ukraine that has pushed up costs of energy and key ingredients. As a result, the company has raised prices sharply.
Graeme Pitkethly, chief financial officer, told reporters: “Consumer sentiment in Europe is at an all time low” as he warned of fears of a “confluence of events” in Europe with energy prices and inflation rising and consumers’ savings waning.
Unilever’s prices rose 12.5pc in the third quarter, with sales rising more than expected despite a 1.6pc fall in volumes.
Mr Piktethly said: “Both the premium segments of the market and the value segments of the market are actually growing quite quickly, at an equivalent rate.”
But he said inflation and the promise of austerity in some countries has prompted a cost-of-living crisis that is pushing some people towards cheaper alternative products, such as private label goods made by retailers.
“The basic needs of our European consumers are occupying a higher share of wallets – things like utilities, transportation and food – and there tends to be cut back on discretionary non-food items.”
