Unilever, owner of Ben & Jerry’s and Dove, says it’s beginning to see “negative prices” in a few of its developing markets, but European consumers are still being hit by the group’s inflationary pressures.
Unilever Registered 5.9 billion euros (6.4 billion dollars) in profit in the primary half of 2024, a rise of seven.8% over the identical period last yr. The consumer goods giant also increased its margin to 19.1%.
The Group owes this to its consumers, who had to simply accept the corporate’s further price increases at the same time as the Group continued to suffer the lasting effects of Covid-19.
However, Unilever CEO Hein Schumacher’s justification for the value increases suggests that if inflation stabilizes, not many additional costs might be passed on to consumers in the longer term.
“In the first half of 2024, we also benefited from the deflation of some components of our basket of goods and the price bridging from a phase of higher commodity inflation,” said Schumacher.
Inflation has fallen across the Western world after stubbornly remaining in double digits through late 2022 and early 2023. In the UK and the eurozone, it’s now at or approaching the central banks’ goal of two%.
According to the Bloomberg Commodity Spot IndexInput prices reached their highest level in a yr in May, but began to fall in the next months.
Schumacher’s comments suggest that Unilever’s first-half gains were partly attributable to consumers absorbing inflation in commodity prices.
The Unilever boss said that negative prices had occurred within the South and Southeast Asian markets. In the event of commodity deflation, the corporate would adjust prices accordingly, the corporate said.
However, this trend has not yet reached the markets in Europe and the USA, where consumers proceed to bear the brunt of cost increases.
The Unilever Group also attributed the falling sales of its ice cream brand Ben & Jerry’s to the bad weather at first of summer in Europe.
Inflation still weighs on consumers
A consistent theme of the post-COVID era of high inflation has been the talent of corporations to successfully pass on rising costs to consumers.
Unilever’s recent profit increase is certainly one of several that might be attributed, no less than partially, to customers bearing the brunt of upper input prices.
A joint IIPR-Commonwealth of Nations study last yr involving 1,300 corporations found that profits in a few of the world’s largest economies rose by 30% between 2019 and 2022, well above the speed of inflation.
An analogous study by Unite Union found that 60% of corporations analyzed increased their profits within the post-COVID-19 period.
The Swiss chocolate manufacturer Lindt & Sprüngli is certainly one of the businesses that’s scuffling with high input costs, reminiscent of rapidly rising cocoa prices.
But like many other corporations, Lindt managed to sell its chocolate bunnies to consumers at inflated prices.
