The sluggish global economy was laid bare by Britain’s biggest consumer brands multinational yesterday as Unilever reported on weak sales in Europe, China, and across most emerging markets.
Of all the Marmite to Dove soap giant’s regions, only North America appeared to be improving in the third quarter sales update, and that was only from a low base.
Unilever’s chief executive Paul Polman said China was proving particuarly tough as retailers were running down their unsold stock and not re-ordering.
Turnover in the quarter was down 2 per cent to €12.2bn, hit by strength of the pound.
Unilever’s experience painted a hands-on picture of the wobbly global economy that has been increasingly emerging from the official data, and which has been responsible for the current falls on stock markets.
Eurozone economies, from Greece and France to even Germany have been heading back towards recession, while China’s economic progress, still stronger than developed nations, has slowed dramatically.
Mr Polman said prices in Europe were lower than a year ago, adding to a relatively cool summer compared with last year that hit the Magnum ice cream maker.
He said: “Altogeher this resulted in reduced third quarter growth, but still ahead of our markets... We expect markets to remain tough for at least the remainder of the year.”
Facing such tough times, Unilever kicked off a €500 million cost cutting drive this year Mr Polman said he was confident the company would beat rivals for profitable growth in sales volumes over the year.
Underlying sales growth for the quarter, stripping out currency effects, was 2.1 per cent while volume growth was virtually flat.
Unilever is far from alone in the major consumer brands companies suffering the global malaise. Earlier this week both McDonald’s and Coca-Cola reported disappointing sales.
Shore Capital analyst Darren Shirley said Unilever’s sales were “below expectations in tougher markets”. The company’s shares fell 81.26p to 2452.74p.Reuse content