Iraq coverage takes toll on Unilever sales

People staying in to watch coverage of the war in Iraq contributed to slower than expected first quarter sales for consumer goods giant Unilever, the group said today.

While sales of personal care products were strong, Unilveler said food sales in the first three months of 2003 were flat compared to the same period last year.

On top of “known phasing” effects such as the later Easter, sales - particularly in foods – suffered from the effects of the war as well as the SARS outbreak in the Far East.

The Anglo-Dutch group, whose products include Hellmann’s mayonnaise, Flora margarine and Knorr soups, said that round-the-clock coverage from the Gulf had led to a decline in the number of people eating out, contributing to lower demand for its products from cafes and restaurants.

A spokesman said today: “During the early stages of the Iraq conflict, people tended to stay at home to watch the war coverage and that had an impact on what we call out-of-home eating.”

The decline in the number air passengers because of mounting tension in the run-up to war as well as fears over the SARS outbreak also hit sales to duty free stores at airports.

And difficulties experienced by a number of retailers in Europe and North America also took their toll.

But despite the slower start, the group said that it was “comfortable” with its targets for the year, which include growth of between 5% and 6% in earnings from its 400 so-called leading brands.

While leading brand growth was just 3% in the quarter it was 5.5% over the last twelve months.