Unilever to treat Europe like Asia as 'poverty returns'

Aug 28, 2012

As eurozone crisis reduces consumer spending, company applies lessons from its poorer markets

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UNILEVER is adapting its European sales policies to mimic those used in the world’s poorest countries as the eurozone economic crisis continues.

The Dutch consumer goods giant, responsible for brands such as Persil and Flora, revealed it believes "poverty is returning to Europe", as Greece and Spain suffer deepening recession and unemployment.

To reflect shoppers’ reduced budgets, the company will sell its products in smaller, cheaper packages, reports The Daily Telegraph. The practice is already used by Unilever in developing nations in Africa and Asia: in Indonesia the company sells individual packs of shampoo for two to three cents.

Jan Zijderveld, head of Unilever's European business said: "If a consumer in Spain only spends €17 when they go shopping, then I'm not going to be able to sell them washing powder for half of their budget."

Unilever has already introduced reduced-size packets of mashed potatoes and mayonnaise in Greece and detergent for just five washes in Spain. It has also created a new low-cost brand in Greece selling basic goods such as oil and tea.

Zijderveld said the company would be able to make a decent profit from the move. Unilever saw revenues grow by 16 per cent in Asia in the second quarter, compared with European growth of only 0.2 per cent.

Zijderveld added that a re-think of in-store service was also necessary to increase product growth, citing the way Apple runs its stores as a prime example.  

"In some supermarkets in Europe, you think: half empty shelves, boxes on the floor, not a sales person in sight - how terrible is that?

"Why can't we sell food like Apple sells devices? Why are there no genius consultants for chicken?"

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