Unilever warns of "lasting changes" in customers as ice cream sales melt away
A London consumer goods company has reported a “near cessation” of sales in some sectors of its business.
Unilever, which operates globally and provides products in food, health and homecare divisions, has said that there was a 0 per cent change in underlying sales up to the end of March, but that there will be “lasting changes in customer behaviour”.
The company’s turnover remained flat at €12.4bn, but it said that it saw a shift in the products that customers wanted, seeing a significant decline in ice cream and out of home food sales, balanced out by an increase in demand for home cleaning products.
Alan Jope, CEO of Unilever, commented: “COVID-19 is having an unprecedented impact on people and economies worldwide.
“We have been able to maintain the supply of product and we are keeping our factories running through the many unpredictable challenges in local operating environments across our value chain.
“We are also opening up new capacity where it is most needed, such as in hand hygiene and food.
“Demand patterns are changing. As the crisis hits countries around the world, we see upswings in sales of hygiene and in-home food products, combined with some household stocking, and near cessation of out of home consumption which is particularly affecting our food service and ice cream business.
“We are adapting to new demand patterns and are preparing for lasting changes in consumer behaviour, in each country, as we move out of the crisis and into recovery.
“The crisis highlights the importance of our commitment to use our scale and brands as a force for good in society, throughout the pandemic and beyond.
“We are supporting communities through donations and partnerships, while our Lifebuoy and Domestos brands are leading the way on hygiene education programmes.
“We take these actions in the knowledge that we enter the crisis with a strong balance sheet and cash position.
“We are systematically reviewing all areas of cash generation and usage and re-evaluating all costs in the light of the current circumstances, so that we can continue to invest in our brands and reallocate funds towards the best opportunities.
“We will continue to adapt throughout this crisis. However, the unknown severity and duration of the pandemic, as well as the containment measures that may be adopted in each country, mean that we cannot reliably assess the impact across our markets and our business.
“We are therefore withdrawing our previous growth and margin outlook for 2020.
“Our portfolio, our financial stability and the quality of our leadership teams around the world mean that Unilever is well-positioned during this crisis and for the changing world that will come afterwards.
“The fundamental drivers of growth continue to be the key principles driving our execution as we remain focused on delivering superior long-term financial performance through our sustainable business model.”
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