Slow and steady wins the race, so the adage goes, and Unilever certainly fits the bill. Its goal of growing sales by 3% to 5% a year won’t excite a lot of people, given how there are technology companies adding one or even two zeros to the end of those figures for their annual sales progression. However, its resilience and stamina are often forgotten strengths.
A year or two ago, the market was questioning whether Unilever could grow at all, yet now it is beating its sales growth target.
“Amid expectations of inflation accelerating this year, Unilever’s pricing power strengths will be put to the test,” said AJ Bell’s Russ Mould.
“It has flagged additional supply chain costs and raw material inflation, which is putting pressure on margins, so the solution would be to pass on those costs to the end customer.
“Of the 5.7% sales growth in the first quarter, 1% can be attributed to higher selling prices and the rest greater sales volumes, so it is already displaying pricing power, particularly in its food and refreshment products.”
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