Unilever shares hit new 2023 low as inflation bites

High levels of inflation across food stuffs, additives, processing, and wages have meant that prices across the supermarket shelves have led to consumers choosing some brands over others. Unilever is one company, where some foods which are described as discretionary such as Ben & Jerry’s ice cream, are being replaced by cheaper own brands in supermarket baskets. This has led to a warning from Unilever and a poor Q3 result, sending shares down to a new low for the year.

(AI Video Transcript)

Unilever share price

Unilever is facing some challenges in the third quarter. They are having to raise prices to combat rising interest rates and inflation worldwide. Unfortunately, this has caused a significant drop in their share price, currently down by 2.9 percent in just half an hour of trading. This decrease has broken a previously reliable support line and taken the stock to its lowest levels since October of last year. This suggests that the stock may continue to fall even further.

Unilever's performance in Q3

One of the main concerns about Unilever is its sales performance in the third quarter, which only saw a 5.2 percent increase, slightly lower than the expected 5.25 percent. The company has noted that consumers are finding it difficult to justify buying certain discretionary food items, like Ben & Jerry's ice cream, because of the higher prices. It seems that these price hikes are discouraging people from purchasing these products, which is impacting Unilever's financial results.

Ben & Jerry's ice cream

To put it simply, Unilever's struggles are causing their stock to go down. This is because they have to raise prices to keep up with inflation, and that is making it harder for people to justify buying their products. As a result, their sales are not increasing as much as they hoped, which is concerning for investors. For example, imagine you want to buy a pint of Ben & Jerry's ice cream, but the price has increased by a dollar. You might think twice about buying it because it's more expensive now. Multiply that by many consumers, and you can see how the price hikes can impact a company's sales.

Overall, Unilever's stock is in a decline because of these struggles, and it's uncertain how low it may go. Investors are concerned about the company's performance and how it will affect their financial results in the future.