Unilever has increased prices and reported an increase in turnover

This article was last updated on April 27, 2023

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Overview

Unilever, one of the popular food and soap giants, witnessed a considerable boost in turnover in the first quarter of 2021, amounting to €14.8 billion. Compared to the previous year, this is an increase of 7 percent in the quarterly turnover. However, the rise in turnover is not entirely because of increased sales but the result of Unilever raising prices for their products, by an average of 10.7 percent to compensate the increased raw material costs and inflation.

Reasons for the Increase in Prices

The reason for such a considerable price hike is due to the increased cost of raw materials and inflation. The prices for all Unilever products, including their famous brands Knorr, Dove, and Magnum, were increased to counterbalance these costs.

Comparison to Growth Last Year

Despite the 10.7 percent increase, Unilever confirmed that the price hike is less notable than it was last year’s 13.3 percent increase in the last quarter. However, compared to the previous year’s growth, the price hikes for food and cleaning products on the market are higher.

Europe Lags Behind

According to Unilever CEO Alan Jope, the company enjoyed a good start to 2021, but the only region that lags behind is Europe. The sales for cleaning products and ice products, amongst others, are still behind in Europe. A large chunk of Unilever’s turnover comes from Asia accounting for almost 50%, North and South America amounting to over 1/3rd and Europe amounts to almost 1/5th.

Turnover Increase in Unilever Divisions

The turnover in all Unilever divisions saw a year-on-year increase, except the food division. However, food and personal care still generated the highest turnover compared to other segments. This includes Rexona and Ax deodorants and Dove’s product portfolio. Unilever has not shared the earnings with this quarterly result and trade update.

The Bottom Line:

The considerable price hike allowed Unilever to generate a 7 percent increase in turnover in 2021’s first quarter, indicating a good start to 2021. However, Europe is still struggling with sales, and Unilever believes the increase in prices is necessary to balance costs that come with raw materials and inflation.