Unilever‘s underlying sales growth was supported by pricing in the third quarter, a period which saw volumes decrease slightly.
The company said that underlying sales in the three months totalled 3.2%. Pricing contributed 3.6% to growth, with volumes down 0.4% in the period.
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Sanford Bernstein analyst Andrew Wood said Unilever’s volumes were up against tough prior year comparisons but noted: “Volume growth was much weaker than expected, seeing its lowest growth in 7.5 years.”
The group’s year-to-date performance saw growth split between volumes and pricing. In the first nine months of the year, underlying sales increased 4.2%, with volumes rising 1.3% and pricing up 2.8%.
Nine-month growth was supported by expansion in emerging markets, CEO Paul Polman said. “Underlying sales growth of 4.2% in the first nine months, including over 7% in emerging countries, was ahead of our markets across all four categories. This was driven by strong innovations in support of our category strategies.”
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Underlying sales growth was offset by currency exchange, the company revealed. In the first nine months of the year, sales declined 1.8% at current exchange rates.
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By GlobalDataUnilever’s update on trading in the third quarter came as it was reported the company has become embroiled in a pricing dispute with Tesco.
According to reports, Unilever is seeking a 10% increase in prices from the UK’s Big Four retailers in order to offset the depreciation of the sterling, which has reached 30-year-lows following the UK’s decision to leave the EU.
Tesco is said to have resisted the request to increase prices on brands such as Knorr, Magnum, Ben & Jerry’s and Flora. This is already hitting availability in some parts of the country and items have been removed from Tesco’s e-commerce sales channel.
