COVID-19 has tremendously impacted countries across the globe. This is because its emergence has disrupted not only normalcy but also crippled economies. More so, the developing countries are having a challenge in maintaining their businesses and clearing their debts. Due to the unending problems, some of the developing countries have opted to seek more help from the superpower states, and in turn, they are getting deeper into debt. Meanwhile, companies like Unilever already predict decreased consumption in the next couple of months. This is so as the majority of the people are leaning more on the precautionary motive of money. They feel it’s best to spend less as they don’t know what awaits them in the future.
Low Consumption Amid COVID-19 Pandemic
Unilever Plc, a consumer company, forecasts a reduction in global consumption patterns amid the first half of this year. This is despite businesses across Africa, Asia, and Latin America slowly returning to normal. Most significantly, markets in East Asia, where the virus first originated, are showing resilience.
“We still hold that the first half of this year will be a continued period of suppressed consumption … with that starting to come back in the second half of this year and then next year,” Chief Executive Officer Alan Jope said in an interview at the Reuters Next Conference on Wednesday.
Dove soap, Hellman mayonnaise, and Tresemme shampoo producers all withdrew their yearly growth target come every April. Mr. Jope remarked that he was worried about making predicting future businesses because of the COVID-19 fluctuations. However, he was optimistic his company would grow ahead of the broader market. Nevertheless, he does not expect the growth to happen anytime soon. In a statement, he said that he did not expect any significant setbacks from a margin perspective and did not want to get in a numbers game until things globally stabilize a little bit.
Meanwhile, the pandemic has boosted sales for packaged foods for companies like Unilever, Nestle, and Kraft Heinz. However, Unilever experienced a sharp decline in foods served in public places like beaches and restaurants. Despite the plunge, Jope is optimistic that the global economy will improve with time as countries like Singapore and China are reopening despite the rising coronavirus cases.
Reshaping Portfolio for Continued Growth
Following reduced consumption rates, companies are taking on different approaches to satisfy their consumer needs. Competition among companies has escalated as everyone is struggling to dispose of their stock. Jope, the Chief Executive Officer of Unilever, stated that his company focused on reshaping its portfolio to ensure all its consumers’ sustainability. I.e., from buyers to investors. This is mainly as Unilever deals in a wide variety of services, from food to medicine to clothes. However, Jope urged investors not to be nervous because of any significant disposal on its beauty and personal care business. Although there might be some cleanup of small beauty and personal care brands, the impact may not be substantial.