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The Markets
by Proactive
Proactive UK has moved.
Coverage of London’s small caps continues on proactiveinvestors.com
Go to Proactive UK
The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK

Fashion & brands

Nestle and P&G give heads up on this week's updates from Unilever and Reckitt Benckiser

Successfully passing on price rises leading to strong sales growth, but that consumers may start to tightening the purse strings further was the consensus

Unilever PLC (LSE:ULVR) and Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) will both be updating the market with trading updates this week.

Results elsewhere suggest they should be coping with inflationary pressures.

Switzerland-based Nestle and US consumer goods giant Procter and Gamble both released results that contained a similar story.

Both said they are successfully passing on price rises leading to strong sales growth, but consumers may start to tighten the purse strings further down the line.

Nestle, behind brands such as KitKat, Milo and Maggi, reported its strongest nine-month sales growth in 14 years, raising full-year guidance as it passed on prices without losing customers.

Organic sales, which cut out the impact of currency movements and acquisitions, rose by 8.5% in the nine months to September end.

However, analysts fear that with inflation continuing to rise, there will come a breaking point for consumers where the likes of Nestle, valued at EUR291bn, will start to feel the impact.

Indeed, most of the organic growth it reported came from rising prices.

US-based P&G also beat Wall Street estimates on sales and profits, benefiting from successfully passing on costs from everything from Head & Shoulders to Tide to its customers.

P&G maintained its full-year organic sales growth forecasts but faces a similar issue to Nestle.

A report from Reuters suggested that demand for household consumer goods has so far fallen at a slower pace than discretionary products.

However, the report suggests that some retailers are concerned high inflation could make it difficult to sell stock and are pushing back on price hikes.

So, a similar story for Reckitt and Unilever next week when they update the market would be a solid guess.

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