With inflation hiking prices ever higher and the cost of raw materials soaring, customers are shying away from Durex condoms, though the company still believes it can improve its profitability.
Durex's parent company, the British multinational Reckitt Benckiser (which also owns also brands such as Strepsils and Dettol), acknowledged that the price rises seen in 2022 have put consumers off premium products.
Over the whole of the year, Reckitt Benckiser production costs rose by 17%, RTBF reports. As a result, the company raised retail prices 12% in the fourth quarter, which led to a 5.8% drop in sales. This decrease is also related to the confinements in China, where shops had been closed.
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The group expects its costs to continue to rise further in the first half of 2023, said chief financial officer Jeff Carr. Yet the executive hopes that this will be no more than 9%, which will slightly improve the company's profitability.
Yet with a shrinking customer base, Reckitt Benckiser is questioning whether it can continue to raise prices to meet cost increases. The group foresees further market volatility, especially since it has yet to replace its CEO after the sudden resignation last year of its boss Laxman Narasimhan, who left for Starbucks.
