Reckitt Benckiser sales of brands including Dettol and Nurofen fall as prices rise

Sales at the maker of Dettol and Nurofen fell when it raised prices and shoppers appeared to be opting for cheaper alternatives in supermarkets and own brands.

Reckitt Benckiser said it raised prices by 12 percent last year as it faced a sharp rise in energy and staff costs. And consumers, faced with rising food and fuel bills, cut sales by 4.6 percent in the third quarter of 2022.

The consumer goods giant’s finance boss, Jeff Carr, said households were facing an “unprecedented” cost of living crisis and were scrambling to cut costs.

He pointed to Reckitt’s Airwick air fresheners and vitamin supplements as areas where shoppers are looking for cheaper alternatives.

But despite the fall in sales volume, Reckitt’s rising prices saw sales reach £3.7bn in the three months to the end of September, up 7.4 per cent on the same period last year.

And it raised its full-year sales growth forecast to 6 to 8 percent, down from a previous lower bound of 5 percent. Despite the modest gains, shares fell 4.1 percent, or 244p, to 5,722p.

Reckitt said it expected further price increases, with inflation among the brands, which also include Durex condoms and Finish dishwasher tablets, peaking later this year.

AJ Bell analyst Leith Khalaf said: “The slowdown in consumer goods company Reckitt Benckiser’s quarterly sales growth and the absolute drop in volume of goods sold have highlighted just how much pressure on household budgets is having an impact.

“The company also offered little consolation to shoppers faced with higher shelf prices, promising to continue to pass on higher costs. From Reckitt’s perspective, this at least shows that its brands retain some pricing power.”

Sales growth was driven by excellent performance in health and nutrition. Sales of health products such as Nurofen and Strepsils rose 10.7% in the quarter.

At the same time, food sales rose 24.7 percent as demand for baby formula surged amid shortages in the US.

Sales at Reckitt’s hygiene division, where products include Lysol disinfectant, fell 1.2 percent in the quarter as demand for detergents continued to decline from levels reached during the pandemic.