FMCG giant Unilever – which owns Marmite, Ben & Jerry’s and Hellman’s among others – has reported underlying sales growth of 7.3% in the first quarter after hiking prices by more than 8% to offset higher supply chain and energy costs.
The company warned that it expected to raise prices further as input costs have ‘accelerated’ through the first three months of the year due to the war in Ukraine.
Unilever expects input cost inflation for the second half of the year to jump up from £1.8 billion (€2.1 billion) to £2.3 billion (€2.7 billion).
As a result, the business is now expecting full-year underlying sales growth to be towards the top end of its 4.5 – 6.5% guidance range, but the full-year underlying operating margin towards the bottom end of its 16-17% range.
In the company’s food and refreshment sector, underlying sales grew 6.5%, with 7.1% coming from price increases.
“This performance was delivered against the backdrop of significant rises in input costs that have further accelerated through the first three months of the year, and the human tragedy of the war in Ukraine,” Unilever chief executive Alan Jope said.
“The delivery of another solid quarter of sales growth builds on the improved growth momentum that we achieved in 2021 and is underpinned by Unilever’s increased focus on operational excellence as well as disciplined adherence to our chosen strategic priorities.
“There is more to do as we navigate our business through unprecedented cost inflation, but we are making good progress. We are committed to sustaining this step-up in our growth and competitiveness.”
The news comes as Big 4 grocer, Sainsbury’s, announced its profits have more than doubled to £730 million but warned of lower profit for the current year due to soaring inflation as the supermarket focuses on supporting customers through the cost of living crisis.