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Unilever recording respectable growth amid rising threat of private labels and discounters marks a win for the company, says GlobalData

Following today’s (18 October 2018) announcement of Unilvever’s Q3 2018 results,

Ronan Stafford, Lead Consumer Analyst at GlobalData, a leading data and analytics company, offers his view on the company’s current progress:

‘‘Unilever’s ability to raise prices and still record respectable growth is a good win for the company as the threat of private labels and discount brands remains high.

“Only 46% of consumer goods companies thought that economic conditions were favorable to their business in the first half of 2018, according to our H1 2018 Business Confidence survey. This highlights the reluctance of companies to raise prices as inflationary pressures means consumers are keeping a close eye on their spending.

“Unilever has recorded respectable sales growth of 3.8% in Q3 despite increasing prices in most markets. This shows that the company has built winning brands that are connecting with consumers. Price inflation is a key issue for consumers in many countries: consumer companies have, therefore, held back on increasing prices as this risked being substituted for private labels or discount brands as budget-conscious consumers looked to cut back their spending.

“Relatively weak volume growth is a concern. However Unilever’s commitment to building brands with purpose means the company is well placed to drive further value growth and protect its share from cheaper alternatives.’’

ENDS

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