Unilever says inflation has peaked as sales growth accelerates

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Consumer goods giant Unilever said inflation has peaked as the maker of Marmite and Magnums reported better than expected sales growth in the first half of the year.

Underlying sales in the first six months of the year climbed 9.1 per cent, beating analysts’ expectations, as the company continued to lift prices.

The group increased prices 9.4 per cent in the first half compared with 13.3 per cent in the final three months of last year. Unilever’s outgoing chief financial officer Graeme Pitkethly told reporters: “We have passed peak inflation.” 

Unilever joins UK supermarkets Tesco and Sainsbury in declaring that inflationary pressures have peaked. The results are the first since Unilever’s new chief executive Hein Schumacher took over this month.

Schumacher takes the reins after a year in which Unilever has faced growing investor discontent over its disappointing share price and an unsuccessful attempt to buy the consumer health division of GSK for £50bn in late 2021.

The Anglo-Dutch company on Tuesday raised its forecast for revenue growth for the year to over 5 per cent, helping send shares in the company up 5 per cent.

But the price increases have eroded volumes, which fell 0.2 per cent over the first half.

The group’s nutrition and ice cream European divisions performed worst, with volumes falling 9.7 per cent in the second quarter after 15.5 per cent increase in prices.

Schumacher said his task ahead was to leverage Unilever’s “strong fundamentals” to drive improved performance and competitiveness.

“This opportunity to step up our performance and unlock our full potential makes it an exciting time to lead Unilever.” Schumacher said he would outline his plans for Unilever when the group reported third-quarter results in October.