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Food sales up, personal care sales down at Unilever

CPG says a surge in eating at home during the pandemic helped boost sales during the second quarter

Consumer products giant Unilever, whose brands include Ben & Jerry's ice creams, Lipton tea and Dove soaps, said second-quarter sales were only slightly lower than the same period a year ago--beating expectations of a drop of around 4%--despite the lockdown measures triggered by the global fight against the coronavirus.

CEO Alan Jope said the company had "unlocked new levels of agility in responding to unprecedented fluctuations in demand."

The company's shares jumped more than 8% on the news.

Unilever's results provide a snapshot of how consumer behaviour has been altered by the global pandemic--shoppers bought more food and drink to consume at home rather than visiting restaurants and cleaned their homes and hands more while spending less on personal grooming.

"Lockdowns in our markets and reduced personal care occasions amidst restricted living, led to lower demand for skin care, deodorants and hair care, which each saw volume and price decline," the company said.

E-commerce grew 49% in the first half of the year as lockdowns and fear of the virus forced people to stay home and shop online.

Second quarter underlying sales growth edged down 0.3% while turnover fell 3.1% compared to the second quarter in 2019 to US$15.4 billion.

The company noted that sales of food, ice cream and tea rose as people spent more time at home. The flip side was that "consumers had fewer personal care occasions from going to work or socializing, and we saw a decline in our personal care business, except for hygiene products."

The importance of hygiene in fighting the coronavirus led to increased demand for hand and home sanitizing products.

"Consumers eating and cleaning more at home, and focusing more on hand hygiene, led to underlying sales growth in North America of 9.5% in the second quarter, despite a negative impact of 3.7% from food solutions and Prestige channel closures," the company said.

Following a review launched in January, Unilever said it would retain its tea businesses in India and Indonesia and separate the company's remaining tea operations into a new business. The separation is expected to be completed by the end of 2021.

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