Unilever Faces Challenges in Maintaining US and European Market Shares

During the fourth quarter, Unilever, known for popular brands like Dove soap and Ben & Jerry's ice cream, faced difficulties defending its market share in grocery stores. Unilever encountered fierce competition from private labels, resulting in a decrease in market share across various categories.

Rising Prices and Consumer Shift

In recent years, the food and consumer products industry has faced escalating prices due to soaring input costs triggered by the pandemic and Russia's invasion of Ukraine. Reuters reported that these price hikes have created a cost of living crisis in Europe and the United States, prompting consumers to turn towards cheaper alternatives, such as private label brands owned by major retailers like Carrefour, Tesco, and Walmart.

Unilever experienced significant underlying price growth, with prices reaching a peak of 13.3% in the fourth quarter of 2022. The company's home care business witnessed a nearly 17% price increase, while its ice cream business reported prices approximately 14% higher during that period. However, according to Nielsen data, Unilever's price hikes have eased recently, with a rise of only 5.8% in the third quarter of 2023.

P&G's Impact and Unilever's Market Share Loss

US News noted that P&G, Unilever's main rival in the household and personal care category, recently adjusted its annual profit forecast due to slowing price hikes. Unilever's shrinking market share has been a cause for concern for investors and analysts, who have cautioned about the potential alienation of shoppers. The rise of private-label brands has posed a particular threat and has been a recurring topic of discussion during conference calls.

Unilever experienced a decline in market share across several product categories. In Europe, the company's market share in the ice cream category decreased by 141 basis points, while mayonnaise declined by 374 basis points. Overall, Unilever's European market share suffered a decline of 160 basis points in food and 52 basis points in household and personal goods.

Challenges in the United States Market

In the United States, Unilever faced significant challenges in maintaining market share in its body wash business, including Dove products, witnessing a decline of 510 basis points. Deodorant brands like Axe also fell by 310 basis points. Unilever's household and personal goods segment in the U.S. experienced a decrease of 245 basis points, while the food segment only lost by 20 basis points.

It is important to note that Nielsen data extracted from checkout registers at grocery stores does not capture all retail channels. Additionally, the data does not provide specific information about which companies have gained market share.

Photo: Unilever Newsroom