Price rises slow, but Unilever and others struggle to win shoppers back
Unilever and Nestle disappointed investors with weak third-quarter sales volumes, but that could change in the coming months as price increases moderate.
Companies have hiked prices since the COVID-19 pandemic to make up for higher costs, prompting some shoppers to look for better deals. The slide in sales volumes of big brands only grew worse after the Ukraine war sparked a cost of living crisis.
Top U.S.
and European investors have this year flagged their concerns about high prices to consumer goods companies. But even though prices are beginning to moderate, consumers have not rushed back.
Companies need to do more to convince investors that sales volumes can return to growth, Richard Saldanha, an Aviva portfolio manager, said in an interview.
«Across the board, organic growth has been price driven and what we want to see is more of a balance between volume and price,» he said, noting the cost of raw materials has decreased and that he hopes prices moderate as a result.
On Thursday, Unilever met market expectations for third-quarter sales growth after raising prices at a slower rate.
«In terms of where pricing is going from here, I think we'll see a continued fall in underlying price growth, but I don't think that's going to go negative,» Chief Financial Officer Graeme Pitkethly said.
Europe was a particular pain point, with sales volumes tumbling 10.7%.
«It's the most difficult trading environment,» Pitkethly said.
Unilever's stock fell 2.5% to a year-low in morning trading.
Nestle, the world's biggest packaged food maker, last Thursday posted lower-than-expected nine-month sales growth as higher product prices made shoppers balk.
Similarly, Tide detergent maker P&G this month reported weak sales volumes,
