Unilever Warns Of Start Of Global Recession, Resulting In Shift In Spending Patterns

The global economy has already slipped into a deep recession which has also brought about dramatic shifts in consumer behavior, said Unilever, one of the biggest manufacturers of grocery brands in the world.

“We believe that talk about a quick recovery is too optimistic. A deep global recession has already started and we are seeing consumer habits changing dramatically. Unemployment is rising across many markets and even for those with jobs, people are saving a bit harder,” said Unilever’s chief executive, Alan Jope.

It was taking an “extremely cautious” stance on asking its 50,000 office-based staff to return to their desks in the United Kingdom, said the consumer goods multinational which owns more than 400 brands including Dove, Marmite and PG Tips.

The UK government has left the onus on the employers to decide on whether to call back staff to office and give them a safe environment to work or to ask them to continue to work from home starting August 1. For the last four months, the UK government has been encouraging people to work from home.

there would a “very gradual return” from September of its office based employees, said Jope, and only if there has been  continued progress in containing the novel coronavirus.

“We anticipate that it will take many more months before we’re back in a steady state of being in the office,” he said.

“We will never go back to a 100% of office-based workers’ time being spent in the office. We see a hybrid future of work where people might spend a couple of days in the office and two or three days at home. This [experience] has unlocked tremendous productivity and flexibility in the Unilever team.”

These comments from the Unilever boss came amidst flat quarterly sales being reported by the FTSE 100-listed company which was a better than expected performance considering the current economic situation globally because of the pandemic. The share of the company rose by 8 per cent following the results.

Compared to the 4.3 per cent drop in underlying sales as expected by analysts, Unilever reported only a 0.3 per cent drop for the three months to 30 June thereby comfortably beating the market estimates.

A 40 per cent drop in sale in its food service business, which supplies restaurants and bars, was reported for the quarter by Unilever while it also reported a 30 per cent drop in sale of its Magnum and Cornetto ice-creams to kiosks and cafes. These figures highlighted how significantly the pandemic had hit the usual trading patterns of the company as well as the market.

The losses mentioned above were however adequately offset by the lockdowns and stay at home orders imposed during the quarter to prevent the spread of thee pandemic all across the world which saw rise in sale of products such as its Hellmann’s mayonnaise and Knorr stock cubes, as well as cleaning products such as Cif as people stocked up their kitchen cupboards with tghse products.

(Adapted from TheGuardian.com)

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