Unilever Says Inflation Past Peak as Sales Climb

Consumer packaged goods giant Unilever believes inflation has reached its peak.

The company’s finance chief made that observation Tuesday (July 25) as Unilever reported its quarterly earnings, which showed sales increasing 9.1%.

According to the report, the company — whose brands include Dove, Vaseline and Ben & Jerry’s — raised prices 9.4% during the first half of 2023, compared to 13.3% in 2022’s closing quarter.

“We’re past peak inflation now, but there will continue to be a high level of pricing growth within our reported numbers,” CFO Graeme Pitkethly told reporters, per a report by Reuters. “The majority of pricing you’ll see is carry forward pricing as we roll through the quarters.”

The news as consumers continue to cut back on grocery spending or seek out stores that offer better deals, as recent PYMNTS research has shown.

The Consumer Inflation Sentiment study found that 57% of consumers have reduced spending on nonessential grocery items, while 47% of shoppers have switched to merchants that offer better prices on groceries.

“In terms of consumer sentiment, inflation is right up top as far as their concerns for the economy are concerned, so this still is a very significant issue for them,” Alex Weinstein, chief digital officer of online grocer Hungryroot, said in an interview with PYMNTS last week.

And most consumers anticipate these inflationary challenges to remain for more than a year to come. Research from PYMNTS’ March study “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” showed that the average consumer expects inflation to hover above pre-2021 levels until October of next year.

Meanwhile, consumers are also frustrated with “shrinkflation,” as noted here Monday (July 24), with many shoppers saying that consumer-packaged goods companies appear to be reducing the amount of product per package while prices rise.

“In recent weeks, viral content across major social media platforms including TikTok, Twitter and Reddit have appeared to show brands charging more or equal amounts for less product — a phenomenon known as shrinkflation,” PYMNTS wrote.

For example, a series of slideshows that went viral on TikTok appears to show that Gatorade has been increasing the size of the indents at the bottom of its bottles, thus reducing the volume of the beverage. The slideshow also posits that Eclipse Gum has been replacing a piece of gum in each package with a “thumb grip,” and that Pop-Tarts has been dramatically shrinking the amount of frosting on its pastries.