Maker of Hellman’s and Dove reckons on consumers buying less this year

Unilever said consumers may buy fewer of its products this year as shoppers balk at price increases on items such as Dove soap and Hellmann’s mayonnaise.

Volumes will drop in the first half and it is too early to predict if they might recover in the second, the company said on Thursday. Unilever reported its weakest operating margin in at least seven years and forecast a €1.5 billion increase in raw material costs in the first half.

Unilever will keep raising its pricing as it has only passed on three-quarters of its higher costs on to consumers, chief executive Alan Jope said in a Bloomberg TV interview.

“We are now probably past peak inflation, but we’re not yet at peak prices,” he said.

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Hein Schumacher, set to replace Mr Jope in July, will be under pressure to boost growth and make the company more efficient. Unilever’s shares have lagged behind those of Nestle and Procter & Gamble, and activist Nelson Peltz last year joined the board to push for better performance at the stock-cube to deodorant conglomerate.

The shares were little changed after the company forecast modest improvement in its 2023 operating margin as raw material costs decline in the second half. – Bloomberg