Unilever has recorded flat underlying sales growth in its first-quarter results, reflecting the impact of the coronavirus pandemic on its food service and ice cream business.

The owner of Ben & Jerry’s, Marmite and Hellmann’s recorded revenues of €12.4 billion during the quarter, an increase of 0.2% when compared to last year’s figure, thanks to positive impact from acquisitions.

Underlying sales in the company’s Food & Refreshment sector declined 1.7% to €4.4 billion compared to a net revenue .Largest volume decline was witnessed in Unilever’s ice cream sector, as the seasonal sell-in for out of home consumption was impacted by lock-down measures and distributors were reluctant to buy ice cream stock due to an uncertain tourism season.

However, these declines were offset by an increase in home consumption and household stocking in some markets, particularly in the USA and Europe which witnessed volume led growth in savoury and dressings. Its Knorr brand saw low single digit growth while Hellmann’s recorded double digits.

Both its North America and Europe sectors benefited from e-commerce which grew as shoppers moved from offline to online channels.According to Unilever, most major markets, outside China, saw normal sales patterns in January and February with Covid-19 impacting in March.The Chinese market ‘slowed significantly’ during the lock-down period as a result of decline in food service, out of home ice cream and retail sales. Unilever’s developed markets recorded underlying sales growth of 2.8%, while its emerging markets declined 1.8% with growth in India impacted by both the slowing market and the lock-down.Once again, Unilever’s tea business – which includes PG Tips and Lipton brands – declined low single digit due and the company said that a strategic review of the business is ongoing, Alan Jope, CEO of Unilever, said: “Demand patterns are changing. As the crisis hits countries around the world, we see upswings in sales of hygiene and in-home food products, combined with some household stocking, and near cessation of out of home consumption which is particularly affecting our food service and ice cream business. 

“We will continue to adapt throughout this crisis. However, the unknown severity and duration of the pandemic, as well as the containment measures that maybe adopted in each country, mean that we cannot reliably assess the impact across our markets and our business. We are therefore withdrawing our previous growth and margin outlook for 2020.”