High demand for hygiene products offsets Unilever’s first-half sales slump

High demand for hygiene products offsets Unilever’s first-half sales slump

THE WHAT? High demand for hygiene products has softened Unilever’s first-half sales fall, helped by Q2 underlying sales dropping 0.3 percent as opposed to analyst forecasts of 3.4 percent. 

THE DETAILS Demand for skin, haircare and deodorant products declined during the COVID-19 pandemic, with the beauty and personal care division falling 0.9 percent to €5.3 billion.

However, the soft sales fall was attributed to Unilever’s swift turnaround in rolling out additional hygiene products for consumers anxious about the pandemic, with the company having added Lifebuoy soap and other hygiene products to 50 markets, while increasing hand sanitizer production by around 600 times.  

The company’s ice cream sales jumped 26 percent in Q2, while its household division increased 4 percent. 

According to the FT, Alan Jope, CEO, said: “We’ve shown good agility in responding to massive changes in demand and in what people are buying and consuming. We’ve seen record levels of growth in some categories and record levels of decline [elsewhere].”

Unilever has also announced it is set to sell or spin off its tea arm, not including the Indonesian or Indian businesses, by the end of 2021. 

THE WHY? While the Q2 sales fall was Unilever’s first decline in 14 years, the company has weathered the COVID-19 storm better than some due to its fast-paced adaptability to the new normal in the face of the pandemic and a surge in consumer demand for hygiene products. 

Looking forward, Jope highlighted how the company was preparing itself for the predicted recession following the pandemic. He said, “It does seem inevitable that we are going to have a big, global economic downturn. We don’t really know the depth and length of that… We are doing lots of work around the business just now to find gaps in our value portfolio.”

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