Consumer goods prices are likely to continue to rise in the near future, warns the CEO of consumer goods giant Unilever Alan Jopp. Price surge ahead: Which goods will rise in price the most?
The situation for manufacturers is complex as there has been extreme pressure on production costs over the last 18 months. There is a serious increase in the prices of petrochemical products, products, agricultural products, energy, transport, logistics, Jope admitted to CNBC. As a result, large manufacturers such as Unilever are accelerating the rate of increase in the prices of products sold. A big price spike is coming in the coming months
Until now, consumers have coped with higher prices without curbing their spending. But that is likely to change this winter as energy prices rise, household savings shrink, and meanwhile the prices of goods and services continue to rise. In October, Unilever published its results for the third quarter of 2022, reporting a price increase of 12.5%.
Have we reached peak inflation and prices?
It is very difficult to say whether inflation will continue to rise or fall because there is one big unknown – energy prices. Given geopolitical and economic uncertainty, not even oil company bosses dare predict them, Jopp points out. What caused inflation and the sharp increase in the price of everything?
The world may be around peak inflation right now, but it probably hasn’t reached peak prices. “Further price increases are ahead, but the pace of price increases is likely to be peaking now,” the executive warned. (that is, prices will continue to rise in the future, but more slowly, p.s.)
Unilever is a global giant and owns brands such as Domestos and Cif detergents, Persil detergents, Dove and Rexona cosmetic brands, Lipton teas and more. In Bulgaria, the company is also known for “Kaliakra” margarines, as well as ALGIDA ice creams.
No one running a business right now has experienced global inflation, we haven’t had global inflation in a long time, Jope admits. But the company he leads is used to operating in conditions of high inflation, thanks to its experience in markets such as Argentina, Turkey and some countries in Southeast Asia. Big stores in Turkey cut prices to please the authorities
Much of the inflation in these countries is actually due to the weakness of their currencies historically. However, they now have to deal with a combination of high commodity prices and currency weakness. Turks are languishing: Prices are crushing, the lira is collapsing
To keep its business profitable, Unilever does not seek to sharply raise prices, but is used to taking measures much earlier than its competitors. “Our instinct is to act quickly when the costs start coming in,” Jope points out.
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