Big brands hold back Unilever sales

Consumer products giant Unilever provided more disappointment on trading today after sales of its leading brands failed to grow in the second quarter of 2004.

The Anglo-Dutch group reported a 0.2% fall in underlying sales of its 400 frontline products, which include Hellmann’s mayonnaise and Dove soap.

This contributed to a 3% fall in turnover to €10.84bn between April and June, although its restructuring programme helped pre-tax profits to rise by 19% to €1.17bn.

Analysts had expected Unilever to report sales growth from its leading brands of up to 2.5% in the second quarter, building on an improvement of 1.3% in the first three months of 2004.

The company blamed weak consumer confidence in many of its key markets, while poor weather drove down sales of leading ice cream brands such as Magnum in Europe.

Rivals were also pricing more aggressively and sales of personal care products in Europe have begun to fall at the same time as home care markets continued to decline.

Chairman Niall FitzGerald said: “Consumer confidence remains weak and a number of our key markets are still growing at below their historical rates with a further slowdown this quarter.”

Unilever drew up a five-year strategy titled Path To Growth to reinvigorate the business and arrest the sales drop.

This overhaul has included management changes at the Prestige fragrances division and the launch of 17 low-carbohydrate products to stabilise sales at SlimFast, which has suffered from the popularity of the Atkins diet.