Unilever has become the latest company to announce price increases to offset rising costs linked to the conflict with Iran. The consumer goods group, whose brands include Dove soap and Lynx deodorant, said prices had "stepped up" in the third quarter in response to soaring commodity costs, with home and personal care products seeing particularly notable increases.
The company reported that underlying sales grew by 5.2% in the three months to September 30, of which 2.3% was due to higher prices. This follows a similar move by fellow household goods firm Reckitt Benckiser, which said on Tuesday it was increasing prices in the face of higher inflation caused by the Middle East conflict, with prices rising by 4% across Europe in the third quarter.
Sales Growth Outlook Raised
Unilever said sales growth was not only driven by higher prices, as it raised its outlook for sales growth by volume. The company now expects "at least" a 3% increase over 2026 as a whole, having previously guided for sales volumes to grow by around 3%.
It also now expects underlying sales growth of about 5% in the second half of the year, compared with its previous guidance of between 4% and 5%.
Food Business Split Progress
Chief executive Fernando Fernandez said: "We have delivered another quarter of competitive growth, led by continued strong volume delivery and a step-up in price to offset the impact of higher commodity costs."
The group is moving to split its food business into a joint venture with US rival McCormick. The £33.8 billion deal, announced in March, will create a major food giant combining brands such as Unilever's Marmite with McCormick's French's mustard.
Unilever said it was on track for a "timely closing" of the deal, which is expected by mid-2027. The company noted that "separation and integration work is progressing well, led by dedicated project teams comprising more than 200 employees across 20 cross-functional teams."
It added: "There has been strong progress on regulatory approvals, with filings submitted on schedule and clear momentum across jurisdictions, reinforcing our confidence in a timely closing."
