Unilever falls after Citi sales, share decline

Unilever, the world's second-largest consumer-products company, fell in Amsterdam trading after Citigroup Inc. said its sales and market share dropped because of competition from private-label goods.

Volume sales fell 12 percent from a year earlier in the four weeks ended Nov. 9, Citigroup said today in a research report, citing ACNielsen figures. Revenue dropped 1.7 percent, and so-called weighted share losses totaled 1.3 percentage points, it said.

More shoppers are buying goods sold under retailers' own names to save money as higher grocery and energy bills drain incomes and job cuts sap confidence. That's eroding demand for branded goods such as London- and Rotterdam-based Unilever's Sunsilk shampoo and Surf detergent, along with higher prices aimed at clawing back increased raw-materials costs.

"Volumes are down across Europe because of pricing, but the point is more that they are losing market share against private label," Nicolas Ceron, an analyst at Numis Securities in London, said by telephone. He advises buying Unilever stock.

Four-week sales volume and revenue also fell at Reckitt Benckiser Plc, the maker of Lysol household cleaners, according to Citigroup. McBride Plc, the biggest European supplier of store-brand goods to supermarkets, said in October private-label products were winning market share in the U.K., France and Italy.

'Not Pretty'

Unilever fell 69.5 cents, or 3.9 percent, to 17.01 euros in Amsterdam trading. The drop in shampoo and laundry-detergent volumes was "particularly disappointing," Citigroup analyst Jeff Stent said in the note, calling the overall decline "not pretty." The total slide sped up from 7.8 percent in the prior four weeks.

"They're not very strong in personal care in Europe," Ceron said of Unilever. "It's because their brand offering is not that good."

Slough, England-based Reckitt's four-week revenue dropped 3.2 percent on an 11 percent slide in volume, Citigroup said. Nestle SA's sales rose 0.1 percent as the drop in volume slowed to 7.9 percent from 13 percent, the bank said.

Reckitt declined 9 pence to 2,775 pence in London trading.