Unilever continues its increased marketing push despite disappointing first-quarter results.
Worldwide sales fell 2% to $11 billion and sales of top brands rose 1.3%, Unilever reported. Gross margins rose despite an increase in price promotions, but the cost of additional marketing mitigated gross-margin growth, per Netherlands-based Unilever. The quarter ended March 31.
Chairman Niall FitzGerald, who has said he will retire Sept. 30, blamed the slow economy and increased competition in some markets.
“Strong brands best take advantage of our category knowledge and the scale benefits of Unilever; they have the margin structure to support a sustained program of innovation and competitive levels of support,” he said in a statement. “However, we are not happy with the short-term sales performance and action is being taken to address this.”
Unilever has concentrated marketing behind key “master brands” as part of its Unilever 2010 growth strategy. FitzGerald said Unilever is “taking the appropriate tactical actions” to improve sales “while implementing our planned innovation and brand-building activities.”
Meanwhile, Unilever’s SlimFast brand is seeing sales rebound slightly since it launched low-carb shakes and snack bars; another 17 low-carb items reportedly are in the offing. News reports attribute SlimFast’s 21% unit sales decline in 2003 to low-carb eating. The new items reportedly account for 20% of SlimFast sales.
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