Unilever: Corporate giant's yearly sales are boosted by higher prices

Total underlying sales grew by 7 per cent in 2023 compared with 2022.

This was driven by prices which rose 6.8 per cent over the period while the volume of items sold crept up by 0.2 per cent.

It is the first time in more than a year that the company sold more products.

Its nutrition and ice cream brands, such as Magnum, Carte D’Or, Knorr and Marmite, saw the biggest price rises while the volume of sales declined, meaning people were paying more money for fewer items.

Unilever said inflation began to cool during the second half of the year from double-digit price growth in the first few months of 2023.

The multinational company said last year it was focusing on its 30 most profitable brands, which make up three-quarters of its turnover, as part of an “action plan” to boost growth and turn around its financial performance.

On Thursday it said it was “moving with speed and urgency” to transform the business.

Nonetheless, its underlying operating profit was up 2.6 per cent to 9.9 billion euros (£8.45bn) year on year.

Chief executive Hein Schumacher said: “Today’s results show an improving financial performance, with the return to volume growth and margins rebuilding.

“However, our competitiveness remains disappointing and overall performance needs to improve.”

The company said it was losing out to private labels in Europe and super-premium products in North America, and its competitiveness in the market was not good enough.

“We are working to address this by improving our execution to unlock Unilever’s full potential,” Mr Schumacher added.

“We are at the early stages of this work and there is much to do, but we are moving with speed and urgency to transform Unilever into a consistently higher performing business.”

Richard Hunter, Head of Markets at interactive investor, commented “Unilever is at the beginning of what it hopes will be a transformational path to a more streamlined and focused business.

"More recent issues have shown that the famous investment adage of “elephants don’t gallop” fully applies to Unilever, whereby large established companies find much difficulty in executing strong growth. “Indeed, for this period, as has been the case for some time, growth has largely been driven by price increases to its products rather than volume growth, and this particular mix is one on which the group has a keen eye.

He added: “In terms of driving growth, the group is likely to increasingly focus on the high quality growth which emanates from its major product lines at the expense of the lesser margin products amid its wide-ranging portfolio. Indeed, the 30 “Power brands”, which account for around 75 per cent of revenues, are receiving particular attention.”