monabri wrote:https://www.reuters.com/business/retail-consumer/unilevers-us-european-market-share-slips-private-label-booms-2024-01-24/
"Investors and analysts, who warned that the prolonged hikes could alienate shoppers in the long term, have called out Unilever's shrinking market share for several quarters, raising concerns over growing private label brands on conference calls."
"From ice cream to mayonnaise and laundry detergent, Unilever lost market share in the quarter, the data showed. In Europe, the company's share of the ice cream category declined by 141 basis points in the month to Dec. 3, while mayonnaise declined by 374 basis points."
"Overall, Unilever's European market share in food fell by 160 basis points, while market share in household and personal goods fell by 52 basis points."
"In the United States, Unilever's body wash business, which includes Dove products, lost the most market share - down 510 basis points - while deodorant brands such as Axe fell 310 basis points in the month to Dec. 2, Nielsen data showed. Household and personal goods in the U.S. fell 245 basis points, while food fell only 20 basis points. Unilever did not respond to a request for comment."
"Unilever, like others in the industry, has also lost market share because it has been cutting down on the variety of products it makes, particularly in ice cream, using artificial intelligence and other tools to help it decide which products to drop."
""Schumacher has highlighted that winning market share is an area where they are focused on delivering improvement," he said. "This will inevitably take time in terms of turning this around, so investor patience is certainly required.""
I think many Lemons foresaw the affect that price hikes & shrinkflation might have. Once brand loyalty has been lost in favour of a cheaper supermarket label then it migh be difficult to coax buyers back. Unilever will have to increase advertising (easier/less costly if the number of products is reduced) and might have to run promotions which will have an effect on margin.
As for using AI to help decide which products to drop...in the old days they might simply get the accountants to "look at the numbers" to decide.
The repeated recent Ben & Jerry shananighans were the last straw for me. They are a pain in the side. I decided to simply invest in an IT which has a higher yield and a growing dividend. I await the Feb 8th results. Mr Schumacher has a difficult job ahead methinks.
All these issues come under what Rumsfeld would term "known knowns". If this were not the case the share price would not be where it is, you can't have it both ways. There is a reason why Procter & Gamble is on a PER of 24 and Unilever is on 16. Investing is not rocket science. If you want to stock pick and outperform then you need to do something different to the herd. If you don't, then stick your money in an index tracker or pay someone who thinks they can do better i.e. an IT or OEIC.