Marmite and Dove owner Unilever warns of price rises due to growing costs

Unilever, the multinational consumer goods company behind well-known brands like Marmite and Hellmann's, has warned that it will continue to push through price increases over the coming months as it struggles to mitigate the impact of rising costs on its business.

According to the company's recent update, the pace of price increases may have slowed down in the second quarter, thanks in part to World Cup-related discounts in Brazil and efforts to maintain competitiveness. However, these factors are only temporary, and Unilever expects underlying price growth to accelerate in the second half of the year.

The company's underlying sales grew by 5.8% in the second quarter, with turnover rising 3.8% to €13 billion. Unilever's CEO attributes this success to the brand loyalty of its products, which has prevented customers from switching to cheaper alternatives despite rising cost of living pressures.

The warning from Unilever comes as the global oil market continues to experience volatility, driven in part by ongoing tensions in the Strait of Hormuz. Higher oil prices have led to increased costs for manufacturers, with some analysts warning that a sustained rise above $100 a barrel could prompt the Bank of England to raise interest rates later this year.

With Unilever's investments in the UK including factories in Wales and Burton-on-Trent, the company's customers may face further pressure if oil prices remain high. Despite this, Unilever's CFO, Srinivas Phatak, has expressed confidence that the company's investment in marketing will continue to pay off, driving sales growth and potentially offsetting the impact of price increases.