Unilever is hurt by a move to 'own brand'

Shoppers trading down to supermarkets' own-brand labels in the recession are hurting consumer goods giant Unilever.

The group behind Dove soaps, Persil, Wall's ice cream, Knorr and Flora admitted it is hurting worst in the UK and western Europe, where sales are down 2.8% and operating profit margins have slumped 3.1 percentage points.

A global restructuring programme initiated by new boss Paul Polman plus rising financing and pension costs saw Unilever pre-tax profits plunge 40% to €1.09 billion (£958 million) in the first quarter of the year.

However, even after stripping out one-offs, Unilever group figures showed a fall in sales and underlying profits.

"Market growth has been more affected by the global economic downturn than the rest of the world and slowed further," the company said. "There has been some down-trading to private label brands."

Polman said Unilever was trading "solidly" given the global downturn.

"We will further step up innovation and brand support from the second quarter and expect this to drive an improved volume performance," he added.