The day after Wal-Mart warned investors that rising prices forced shoppers to cut back on in-store purchases, reducing profits. UnileverThe consumer goods giant, whose products line up on retail shelves, strengthened the message.
On Tuesday, makers of dub soap, Ben & Jerry’s ice cream, and Hermann mayonnaise offset a 2% drop in the amount of what consumers buy, raising prices to 11% higher than in the same quarter last year. Said that. It was the fourth consecutive quarter that prices outperformed the company’s sales growth.
Unilever raised its sales forecast this year, but said profits are likely to be at the lower end of the forecast range. According to the company, costs driven by rising prices for plastics, palm oil, aluminum and other commodities will increase by € 4.6 billion ($ 4.7 billion) this year, more than triple last year.
Unilever’s results, which tend to be seen in Wal-Mart’s recent financial reports, suggest that some people may reduce their purchases or trade down to cheaper store brands by giving shoppers higher prices. I am. Unilever said it added € 200 million to its marketing budget in the first half of this year to keep high-priced brands in the minds of consumers. This is another factor that can hurt profits.
“Inflation challenges are persistent and the global macroeconomic outlook is uncertain,” Unilever CEO Alan Jope said in a statement. But investors seemed encouraged by Unilever’s ability to survive this fragile economic moment, with London-listed stocks rising nearly 3%.
Signs that premium brands may be able to retain customers despite rising prices came from Unilever’s ice cream division, one of the few categories that recorded volume growth.Apart from this, a high-class Swiss chocolatier in the same flow Lindt & Sprüngli On Tuesday, Zurich’s inventories were reported to have increased by more than 4%, with second-quarter sales and profit growth higher than expected.
Wal-Mart’s share price fell about 9% in pre-market transactions. A retail giant’s warning that unsold inventories need to continue to be marked down as many shoppers are shifting to cheaper, lower-margin products shows how fast inflation dominated the economy. I am. last month, Target He also warned that lower inventory prices would reduce profits.
The Federal Reserve is expected to take positive action this week to curb price increases and raise another significant rate. This is a move that risks a recession. More signs of how stubborn high inflation is hitting people’s wallets are financial reports by Coca-Cola, McDonald’s, and other consumer companies to be released later Tuesday. Will come from.
Michael Cokeley Contribution report.
