Consumer goods giant Unilever warned this morning of tough times ahead due to rising commodity costs, despite managing to beat its third-quarter sales forecasts.
The company, which owns more than 400 brands ranging from Ben & Jerry’s ice cream to Toni & Guy hair care products, announced a 5.9% rise in sales, but chief executive Paul Polman cautioned: “The environment will remain challenging. Commodity cost inflation is high and remains volatile and there is no sign that the level of competition will ease”.
His comments follow the closure of three Unilever plants in Wales last month with the loss of 300 jobs, and rival Nestle’s announcement this month that it saw growth slow in the first nine months of the year.
Unilever’s 5.9% sales rise beat the forecast 5 per cent and follows a second-quarter increase of 5.8%.
Chief financial officer Jean-Marc Huet said its cleaning, hair and skin care products did particularly well in China despite the country’s growth slowdown, while brands such as Tresemmé and Dove made strong headway in Brazil.
Overall Unilever, the world’s third-biggest consumer goods group, saw growth of 12% in developing markets, which make up 55% of sales.
The markets responded well to the result, and the shares rose 3% this morning to 2343p.
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