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Unilever sees pandemic changing consumer demand

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Anglo-Dutch consumer giant Unilever reported Thursday a slight rise in first quarter sales and said the coronavirus has caused hygiene product sales to rocket while those of ice cream melted.

The firm, which produces Magnum ice cream, Domestos household cleaner and Lipton tea among other things, said sales edged up by 0.2 percent to 12.4 billion euros ($13.3 billion) from the same period a year earlier.

Unilever withdrew its outlook for the year however, and its shares fell sharply in Amsterdam.

“The COVID-19 disease is having an unprecedented impact on people and economies worldwide,” chief executive Alan Jope noted in a statement before adding: “Demand patterns are changing.”

The global crisis caused “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,” he said.

Unilever, based in London and Rotterdam, said skin-cleansing products sales were steadily growing, as health authorities stressed the importance of washing hands.

Demand for home cleaners like Cif and Domestos bleach was also strong, as was that for what the company calls “in-home food products” such as Hellman’s mayonnaise.

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But as travel restrictions and lockdowns put a sharp brake on leisure and tourism activities, Unilever saw sales plummet elsewhere, particularly of Magnum products.

In Europe, Turkey and Latin America, sales “were heavily impacted by lock-down measures and the reluctance of distributors to commit to buying ice cream stock with an uncertain holiday and tourism season,” Unilever said.

One of the world’s largest producers of consumer goods, the group said it was maintaining a steady supply of products.

“We are keeping our factories running through the many unpredictable challenges in local operating environments,” Jope said.

Unilever maintained its quarterly dividend payout at 0.41 euros per share, but withdrew its outlook for the rest of the year.

“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,” Jope said.

Investors picked up on a negative sentiment, with Unilever’s share price shedding almost 5.0 percent in mid-morning trade on the Amsterdam stock exchange while the AEX index was off by just 0.64 percent.

[AFP]

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