Unilever ice cream sales take summer hit, but soap and bleach remain popular

Ice cream sales at consumer goods giant Unilever took a hit as tourists stayed away from the hotter climates of Italy and Spain during the summer.

But the company behind Dove soap, Lynx, Ben & Jerry’s ice cream and Pot Noodle said it continues to benefit from the Covid-19 crisis – with sales of soap and hand sanitisers remaining strong.

Social distancing, new lockdown measures and home working continues to leave customers opting to go without deodorant and skin care routines, it added.

And while tourists stayed away from hotspots and a cool ice cream, they were more than happy buying extra food for the home, with strong sales via supermarkets and grocers.

Total sales in the three months to the end of September hit 12.9 billion euros (£11.6 billion), down 2.4% compared with the same quarter a year ago – although this fall was mainly due to the euro weakening.

On Unilever’s preferred measure – underlying sales growth – sales rose 4.4%.

Home care sales, which includes Domestos bleach and fabric softener Comfort, grew the fastest – up 6.7% to 2.6 billion euros (£2.35 billion).

Bosses highlighted the launch of its Domestos bleach products in China and grew sales of its laundry products, Omo and Comfort.

The beauty and personal care division grew 3.8%, benefitting from strong sales of soap and sanitiser via its Dove products.

The company said demand for hand hygiene remained high, but cooled slightly compared with the height of the pandemic in the second quarter.

But with social distancing and home working commonplace, customers remain less willing to keep up with staying fresh and maintaining routines as sales of skin care and deodorants both dropped.

However, Unilever did point out that we are all washing our hair more, even if we may not be styling it as much.

The food and refreshments division rose 3.7% with bosses highlighting high demand for Hellmann’s mayonnaise, Ben & Jerry’s and Magnum ice creams.

Sales cooled for ice creams out of the home – Unilever owns Walls ice creams – especially in Italy and Spain where a lack of tourists left ice creams in the hot sun a distant memory.

The food service business fell by 20% whilst lockdowns and restrictions reduce demand for eating out, the company added.

Bosses also pointed out that growth has been stronger in Asia, where lockdown measures have been eased, while Europe struggled as prime promotions hit profits.

Chief executive Alan Jope said: “The environment we are operating in will remain unpredictable in the near term, so we will continue to maintain the speed and agility of our response.

“Our focus remains volume-led competitive growth, delivering absolute profit and free cash flow.”

The company also warned that a planned unification under a single UK entity is still threatened by a Dutch Bill that would impose an exit tax.

The Anglo-Dutch firm’s unification earlier in October received the backing of UK shareholders, but Unilever remain concerned over a Bill before the Dutch parliament aimed at securing a tax payout before any move.

It said: “Despite the amendments made, Unilever has received legal advice that, if the Bill were enacted in its current form with retroactive effect and were applied to unification, it should infringe the Dutch UK tax treaty, other tax treaties which the Netherlands has concluded with states in which shareholders of Unilever plc or Unilever NV reside, primary and secondary EU law and the First Protocol to the European Convention on Human Rights.”

“It is not clear when, or indeed if at all, the Bill will be enacted, or in what form,” it added.

However, the company insisted its unification “remains in the best interests of Unilever, its shareholders and other stakeholders as a whole”.