Essity Raises Prices as US Restaurant Demand Declines

Essity is raising prices across its business areas to counter increasing raw material and energy costs. The Swedish hygiene products manufacturer is facing a downturn in its professional hygiene unit, which generates 40% of its revenue in the United States, reporting declines in sales, volumes, and prices during the third quarter.

CEO Ulrika Kolsrud attributed the decline to a drop in American restaurant patronage, noting that "Consumers are not going out to restaurants as much as they do in Europe." This trend is driven by a slowing jobs market and rising consumer prices, which grew 3.7% in September and outpaced hourly wage growth of 3.0%.

The company's struggles coincide with broader economic data, including a Gallup survey showing a significant decrease in weekly restaurant visits compared to 2019 levels. Essity is now managing higher costs of goods sold alongside the drop in demand from the U.S. professional market.