Price cuts boost volume growth at Unilever

Posted by James Ferre on 6th November 2009

Unilever last night reported strong volume growth in the third quarter but price falls dented sales growth compared to the first half of the year.

The maker of Street and Lipton announced a 3.4% increase in underlying sales growth for the third quarter, compared to 4.1% for the first three quarters but volume growth picked up to 3.6% (it stands at 1.4% for the first nine months).

Despite the growth in sales and volumes, profit has fallen by 36% in the first nine months due largely to asset sales.

“We have seen further good progress across all regions and the majority of countries and categories,” Paul Polman, Chief Executive Officer of Unilever, advised. “Our market shares are responding to stronger innovations, greater consumer value, increased marketing support and better execution.”

The consumer products giant said that prices had been drifting down due to reduced input costs. They had also been cutting prices in a bid to improve volumes, with all regions reaping improved volume growth in the third quarter as a result.

“Market conditions remain challenging and in this environment we will continue to increase investment behind our brands and build long-term capabilities in research and
development,” Mr Polman added. “We are on track towards our objective of restoring volume growth while protecting margins and cash flow for the year as a whole.”