The large sellers of consumer products Danone and Reckitt Benckiser (RB) are counting on better sales this year due to the sharp rise in inflation. Indeed, the overall tenor of price increases makes it possible for companies to increase the prices of their products.
Danone, the company behind Activia yoghurt and Evian water, has noticed a strong demand for baby food and bottled water lately, even after prices went up. So far, consumers seem to accept the price increases.
Danone now expects comparable store sales growth of 5 to 6 percent for this year. Previously, the French company had expected a 3 to 5 percent growth. According to Danone, growth was already 7.4 percent in the year’s first half.
Care and cleaning company RB is known for brands such as Durex, Clearasil, Nurofen, Vanish, Dettol, and Cillit Bang. The British group expects 5 to 8 percent turnover growth, whereas it was previously 1 to 4 percent. RB also expects margins to increase.
Unilever previously reported that higher ingredient costs for the food and personal care group had little impact on the results in the first half of this year. However, the company behind brands such as Knorr, Ola, and Dove also raised prices to absorb those extra costs and expects to continue.