Unilever Cutting Prices grows as Competition Shampoo Grows

25

LONDON—

Unilever


UL 1.75%

PLC said it was forced to reach lower prices in the US. To compete in the market of shampoos

Procter & Gamble Co

, as Dove owner and TRESemmé reported slower revenue growth in the third quarter compared to a previous year.

“There is a very lively and competitive battle in hair care in North America,” said the Chief Financial Officer

Graeme Pitkethly.

Unilever reported sales of € 13.25 billion ($ 14.64 billion) for the quarter, up from € 12.53 billion in the previous year. Basic sales growth – the close-up figure was 2.9% focused on currency movements and dealings. This is a decline since a year ago when Unilever reported a growth of 3.8%, and just below analysts' estimates for growth of 3%.

Unilever shares where up to 2% were in early trade after the announcement.

Mr.

Overall, the results were driven by volume and price, and market growth was driving sales.

In North America, however, Unilever prices rose only 0.6% compared to a 1.5% increase a year earlier. Mr Pitkethly blamed the competition with P&G to cater for price growth, stating that the company U was “heavily focused on the basic principles” in hair care after “a very relentless period.” T

Hair care was a key area for consumer goods companies in developed markets such as the US and Western Europe for years, and more recently in China. Shampoo provides large profit margins and the potential for innovation by adding minor ingredients such as vanilla extract or keratin proteins.

In the case of Unilever, it is very important that a shampoo is successful against its competition. Over the past decade, its focus has been on personal care products. New Chief Executive

Alan Jope

was a leader in his previous personal care hand.

Unilever Alberto Culver, manufacturer of hair care products Alberto VO5 and TRESemmé, bought $ 3.7 billion in 2011 and TIGI's professional hair care business for € 411.5 million in 2009. Since then, the new range of shampoos, Unilever has been armed. business has gone on the attack in the United States. Its hair care business in North America now has around 3% of global sales.

The company has doubled digital marketing in recent years, with a YouTube channel that offers styling tutorials. He also used social media channels to gain insight into consumers who can transfer new products and send bar shampoos under his Love, Beauty and Planet brand, and eliminate plastic packaging.

P&G has implemented its Herbal Essences and Aussie hair brands worldwide and said the company is focused on improving products, packaging, communication and distribution. He launched a new waterless sulfate shampoo under his Pantene brand and sent the formula and packaging to Head & Shoulders.

Write Saabira Chaudhuri at saabira.chaudhuri@wsj.com

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