Unilever PLC (LSE:ULVR) is likely to continue hiking prices this year, continuing a trend of big companies passing costs on to consumers.
Barclay’s analysts suggested price rises will be Unilever’s key tool in battling cost pressures that it reported in today's annual results, which continue to spill over from last year’s rampant increase in fuel and raw material costs.
The consumer goods giant upped prices in Europe by 13.2% and 8.9% in the fourth and third quarters respectively, while cutting volumes. Across the group, underlying price growth was 13.3% in the quarter.
Chief executive Alan Jope, who is set to depart from the role later this year, implied Unilever should have used its pricing power more in recent years in Europe, hinting at what is coming down the line for shoppers in the UK and elsewhere.
UK grocery price inflation rose a record 16.7% in January, according to recent research from Kantar, and it's not just Unilever that is eying price rises, with consumer goods rivals such as Nestle and supermarkets suggesting that more shop price inflation is around the corner.
Unilever’s food and ice cream products will be most impacted by price rises, the Barclays analysts said, including brands like Hellmann’s, Horlicks, Ben & Jerry’s and Magnum.
Sales volumes from the FTSE 100-listed conglomerate are set to fall in the first half of 2023, meanwhile, following on from a 3.6% decline in the final quarter of 2022, Barclays predicted, adding that sales quantities should return to growth in the final quarter.
Barclay’s added it viewed Unilever as a balanced business, following its full-year report on Thursday where it announced a €9.7bn (£8.58bn) profit for last year.
Rising prices are set to continue across the wider retail industry this year, with eight out of ten non-food retailers admitting they would up prices to stem costs, in a Retail Economic survey.
UK consumer price inflation data for January from the Office for National Statistics is due next Wednesday, following a drop in CPI to 10.5% in December from 10.7% in November and 11.1% in October.