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Are you paying the price? Drop in Unilever sales in Israel - voila! Of money


Unilever, which owns a series of locally grown brands alongside desirable imported brands, focused most of the discourse against the cost of living on social media and got into a commercial dispute with the Shuffler chain

A conflict is connected with the largest retail chain in Israel.

Is he the one who hurt Unilever's sales? (Photo: none)

It wasn't a good quarter for Unilever, to say the least - and now it's time to pay: the company that manufactures Thelma products, including Cornflax Champions, Pillows, Click, Bedin, Pinook, Bagel Bagel and others, and owns desirable import brands such as: Dove, Hellman's, Kanor and more, suffered a sharp drop in sales, in the last quarter of 2022. Sources estimate that it will soon be a drop of close to 40%, meaning - tens of millions of shekels.

When you take into account the fact that some of the company's manufactured and imported products became more expensive by nearly 15%, the drop becomes much sharper.

The public outrage at the company, given the updated and more expensive prices of its products, is perhaps understandable, but it is not clear why it is Unilever that is paying such a heavy price for the increase in the cost of living, since many manufacturers, importers and distributors have raised prices over the past year.

One explanation is that while other companies followed a method of partial and creeping price increases - that is, some products at a time over several beats, in Unilever's case several products identified with the company became more expensive at once.

But this will also be only a partial explanation.

Another possible explanation is the negative discourse created around the company and its products.

It wasn't always related to the prices.

Unilever started the conflict with public opinion in Israel when, as the owner of the Ben & Jerry's ice cream brand, it cooperated with the company's decision not to authorize its Israeli franchisee to sell its ice creams beyond the green line.

Although Unilever came to its senses (albeit only because of public pressure in the US, which resulted in the cessation of institutional investments in its shares and a decrease in value), part of the public apparently remains with a negative sentiment towards the corporation.

The next stage was an open war by the largest retail chain in Israel, Shufersal chain, at the height of which even signs were placed on the shelves explaining to customers why the company's products are not on the shelves - and directing them to purchase substitutes, in some cases from the chain's private brand.

And if that wasn't enough, Guy Lerer's "The Tube" program also joined the fight and called on viewers to boycott its products.

Negative discourse on social networks did indeed harm anyone who dared to raise prices, but from monitoring and analyzing the social discourse, it becomes clear that in the month of November 2022 (for example), the peak month in the conflict between the corporation and Shufersal, the company received the maximum number of calls for a consumer boycott, far above what was Some of other "expensive" companies.

Although the battle with the large retailer focused most of the attention, other chains such as Yohannoff, Beitan Wines, Usher Ad and others displayed shelves empty of the company's products and directed consumers to substitutes.

Thelma's pillows.

A product that was damaged a little less due to the fact that no suitable replacement was found for it (photo: Yehats)

And from calls to boycott - to actions: in October, the first month of the fourth quarter of 2022, click sales dropped from NIS 3.3 million (in September) to NIS 2.4 million.

Cornflax Thelma experienced a decrease from NIS 2.6 million to NIS 1.9 million in the same month and even pillows, a product that has fewer reasonable substitutes, suffered a decrease in turnover between September and October 2022 of close to NIS 300 million.

Initially, they tried to explain some of the declines by the fact that shopping for Rosh Hashanah was held at the end of September and the seasonal decline is only natural, but the trend intensified in November 2022, which was a peak month in the negative discourse surrounding the company and its brands, as mentioned also because of the well-publicized conflict with the Shufersal chain.

It should be noted that a similar struggle by the retail chain, against Tnuva, was slightly less successful, due in part to the fact that many Israelis prefer the brands of the large milk producer, so it was difficult to offer them an adequate replacement (in the end Shufersal aligned with the new price list, even if " to the milk producer by leaving other brands of its products off the shelves of the largest supermarket chain in Israel).

There were those who wondered in the past whether the fact that this is a huge international corporation and one could assume that the Israeli market is not at the top of their minds.

However, an examination of what is happening with the company's products around the world shows that even in the US and Europe, the prices have risen sharply.

Alan Jupp, the company's CEO, explained that he had no choice but to increase the prices due to the rising cost of raw materials and production and transportation costs.

Initially, the policy proved itself: the company's total sales around the world increased in the third quarter of 2022, despite a decrease in volume, that is: consumers in the world bought less but paid more,

It will be interesting to see how Unilever will react to the data in Israel, although it is likely that they will not lead to lower prices, certainly as long as the consumer atmosphere is one of rising prices.

  • Of money

  • consumption


  • Unilever

  • Cushions

  • cornflakes

  • Thelma

  • Shufersal

Source: walla

All business articles on 2023-01-09

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