Unilever, Coca-Cola and McDonald’s has hiked up their prices on 26 July amid global inflationary pressures.
Prices for Unilever’s UK’s group brand, inlcuding Dove’s soap, Hellaman’s mayonnaise and Cif cleaning products all rose by 11.2% in the second quarter compared to the previous year, the company revealed.
According to the FMCG brand, it managed to report higher than expected sales even though volumes were 2% lower as consumers swapped to more affordable products.
Similarly, Coca-Cola reported its products rose by around 5%, and McDonald’s revealed it was considering adding more discounted menu options to cater to customers swapping to cheaper alternatives.
The fast food chain’s increase in sales was attributed to the “strategic menu price increases”, the company said.
However as the cost of living crisis continues to bite, Unilever explained that it was losing its consumers to supermarker own-brands – especially in Europe.
As a result, the global FMCG brands has boosted spending on advertising and expects its margins to take a hit this year as it absorbs some of the increased costs of material and goods.
Nestlé will also be increasing its product pricing by up to 6.5%, as previously warned by the company’s chief executive, Mark Schneider in April.
Commenting on Nestle’s price rises, Finance.co.uk editor in chief, Laura Rettie said: “Sadly this is just another in a long line of businesses that are being forced to hike their prices.
“Firms are making the difficult decision to choose between passing on the increase in expenses to their customers, making less profit or decreasing the quality or quantity of goods or services. This isn’t about greed for many businesses – it’s about survival.”
“We are entering into a period of slower economic growth. Whether it tips into full-blown recession remains to be seen… our ability to navigate these conditions is almost enitrely dependent on the strength of our brands,” Unilever chief executive James Alan Jope said.
“We are being frequently asked: ‘Will wages keep up with inflation?’ And the answer is no . . . inflation is a scourge and impacts everyone’s standard of living.”
Coca-Cola’s chief executive James Quincy said consumers were not yet cutting back but explained that “a typically recessionary pattern . . . would be consumers initially stop buying high-ticket items, discretionary things. ‘I’ll replace the car later, I’ll replace the mattress later.”
“They then start saving on the lower-ticket items . . . We can see, in some categories in some countries, what looks like the beginning of that process.”