Unilever, known for brands like Dove soap and Ben & Jerry’s ice cream, faced challenges defending its grocery store market share in Europe and the United States during the fourth quarter, according to data. The company yielded ground to private labels and streamlined its product offerings. In response to sharply rising input costs stemming from the pandemic and exacerbated by geopolitical tensions such as the Russia-Ukraine conflict, the food and consumer products industry significantly increased prices. This surge led to a cost of living crisis, prompting consumers to turn to more affordable private-label options offered by retailers like Carrefour, Tesco, and Walmart.
During the peak of these price hikes in the fourth quarter of 2022, Unilever experienced an underlying price growth of 13.3%. Notably, its home care business saw prices rise by nearly 17%, while its ice cream business witnessed a roughly 14% increase. However, the pace of price increases has slowed, with Unilever raising prices by only 5.8% in the third quarter of 2023, as per Nielsen data.
Procter & Gamble (P&G), Unilever’s main competitor in household and personal care, recently revised its annual profit forecast downward due to a deceleration in price hikes. Unilever is set to report its full-year earnings on Feb 8. Concerns have been raised by investors and analysts over Unilever’s diminishing market share, particularly as private-label brands gain traction. This trend was evident across various categories, from ice cream to mayonnaise and laundry detergent.
In Europe, Unilever’s share of the ice cream market dropped by 141 basis points, while mayonnaise saw a decline of 374 basis points. Overall, the company’s European market share in food decreased by 160 basis points, and in household and personal goods by 52 basis points.
Similarly, in the United States, Unilever faced market share losses, with its body wash business, including Dove products, experiencing the most significant decline of 510 basis points. Deodorant brands like Axe also fell by 310 basis points. Household and personal goods saw a decrease of 245 basis points, while food only dropped by 20 basis points.