Unilever’s sales of Magnum go up after it raises costs.
The consumer goods giant said that its overall pre-tax profit went up by 21% to €5.2 billion (£4.4 billion), but the number of goods it sold went down.
Supermarkets like Tesco have said that sellers shouldn’t raise their prices when inflation is high.
The boss of Unilever said that the company had not made its customers pay for higher costs.
Hein Schumacher, the CEO, also said that he thinks inflation, which is the rate at which prices rise, has reached its peak. “We do see inflation moderating by the end of the year,” he said. “This will lead to more moderate prices by the end of the year.”
“We’ve seen high volatility because of drought in Europe and rice shortages in India, as well as geopolitical issues, so we’ve had a lot to deal with,” he said, talking about how much the company has to pay for raw materials.
Supermarkets, who have been accused of “greedflation” themselves, have said that sellers have raised prices.
Greedflation is the idea that businesses take advantage of high prices to make more money.
Mr. Schumacher said, “We have not passed on inflation to customers, and as you can see, we have felt higher costs through lower margins as a group.”
To figure out a company’s profit margin, you take the total sales and subtract all the costs of doing business, like pay and energy bills.
Over the six months ending in June, Unilever’s profit margin grew by a little bit to 17.1%.
The regulator, the Competition and Markets Authority, recently looked into how grocery stores set their prices. They found no proof that supermarkets were trying to make extra money, but they said it was important to keep the market “under review” and that they would now look at the whole supply chain.
Overall, Unilever’s sales went up by 2.7% to €30.4 billion.
In its home care business, which includes brands like Persil, Domestos, and Cif, sales went up by 8.4% to €6.2bn.
In the six months leading up to the end of June, Unilever sold 2.5% fewer goods, but its prices went up by 11.2%.
The company that makes Cornettos saw the same thing happen in its ice cream business. The value of sales went up, but that was because prices went up and the number of goods sold went down by 5.2%.
In its other food business, where brands like Hellmann’s are sold, sales went up by 10.4% to €6.6bn. Prices went up by 12.6%, but sales went down by 1.9%.
In its other businesses, like personal care and beauty and wellness, where high-end names like Hourglass are sold, prices and sales both went up over the last six months.
Food prices have been a big reason for the UK’s high inflation, which is the rate at which prices are going up.
Food and soft drink price inflation slowed to 17.4% in the year leading up to June, but this is still close to historically high levels. The Office for National Statistics said that inflation in the UK as a whole went down to 7.9% in June.
Why is it so high in the UK?
Graeme Pitkethly, who is in charge of finance at Unilever, said, “We’re past peak inflation now. The main change we’re making to the business is that we’re putting more attention on growing the number of sales.
The company that makes Mr. Kipling cakes and Oxo stock cubes said last week that it thought recent input cost inflation had “past its peak.” It also said that prices won’t go up for the rest of the year.