Sales at the maker of Dettol and Nurofen fell as it put up prices and shoppers appeared to opt for cheaper supermarket and ownbrand alternatives.
Reckitt Benckiser said it put up prices by 12 per cent over the past year as it faced soaring energy and staff costs. And consumers facing their own rising food and fuel bills cut back, with sales volumes falling 4.6 per cent in the third quarter of 2022.
The consumer goods giant’s finance boss Jeff Carr said households were facing an ‘unprecedented’ cost of living crunch and looking to cut costs.
Sales at the maker of Dettol and Nurofen fell as it put up prices and shoppers appeared to opt for cheaper supermarket and ownbrand alternatives
He highlighted Reckitt’s Airwick air fresheners and vitamin supplements as areas where shoppers are looking for cheaper alternatives.
But despite a drop in the amount of products it sold, Reckitt’s price rises meant sales hit £3.7bn in the three months to the end of September, up 7.4 per cent on the same period last year.
And it upped its forecast for full-year sales growth to between 6 per cent and 8 per cent, scrapping a previous lower limit of 5pc. Despite the slight upgrade, shares slumped 4.1 per cent, or 244p, to 5722p.
Reckitt said there were further price increases to come, with inflation across its brands – which also include Durex condoms and Finish dishwasher tablets – to peak later this year.
AJ Bell analyst Laith Khalaf said: ‘Slowing quarterly sales growth at consumer goods outfit Reckitt Benckiser, and an absolute decline in the volume of goods sold, highlighted how the big pressures on household budgets are having an impact.
‘The company also offered little comfort for shoppers facing higher prices on the shelves as it pledged to continue passing on higher costs. From Reckitt’s perspective this, at least, demonstrates that its brands retain some pricing power.’
Sales growth was driven by a bumper performance in its health and nutrition businesses. Health products such as Nurofen and Strepsils saw sales grow 10.7 per cent in the quarter.
Meanwhile its nutrition sales grew 24.7 per cent as demand for baby formula soared amid shortages across the US.
Sales at Reckitt’s hygiene division, where products include Lysol disinfectant, slipped 1.2 per cent in the quarter as demand for cleaning products continues to ease from levels reached during the pandemic.
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