Unilever plots to cut out the supermarkets

UNILEVER is to target shoppers directly with more of its premium products as it fights off the threat from cost-cutting supermarkets.

The company behind Marmite and Dove soap said it wanted more of its businesses to adopt the tactics of Dollar Shave Club, which uses a subscription model to sell grooming products online.

These include its gourmet tea company T2 and a growing stable of so-called prestige beauty brands.

At the moment, direct-to-consumer sales account for 5pc of Unilever’s revenues, but chief executive Paul Polman said there was no reason why that figure could not be doubled.

His comments come as supermarkets such as Tesco and Sainsbury’s are turning the screws on Unilever, striking mega- deals to merge or forge partnerships that massively increase their buying power with the consumer goods giant.

But Polman said online sales, allowing it to bypass supermarkets, were rapidly increasing. He added: ‘Every shopping journey now has a digital component.

‘We’ve learnt a lot from Dollar Shave Club. We’ve been able to take that knowledge and expand it to other parts of the business, like our premium tea business T2.

‘We are now also seeing our online business taking off… and with our prestige businesses we see more opportunities to go direct to consumers.’

The model used with Dollar Shave Club is subscriptionbased. Customers pay a monthly fee for shaving razors, foams and gels which are posted to them.

Polman said more of Unilever’s prestige beauty products could deploy this type of service. The firm has snapped up a number of companies selling premium and eco-friendly products in recent years, to attract younger shoppers. These have included T2 teas, vegan mayonnaise and ketchup maker Sir Kensington’s, and organic tea firm Pukka.

On Tuesday it revealed a takeover of ethical beauty business Space NK, adding to a cosmetics arsenal that also includes Hourglass and Carver Korea.

In its second-quarter update, Unilever said it expected revenues to pick up in the latter half of the year as it pushes through price rises.

Sales during the quarter rose just 1.9pc, compared to 2.3pc expected by analysts. For the first half, sales excluding its spreads business rose 2.7pc, below estimates of 3pc. The bulk of growth came from selling more products rather than getting higher prices for them.

Unilever warned last month that a truckers strike in Brazil would hit second-quarter results.

Polman said: ‘Our first-half results show solid volume-driven growth across all three divisions, which was achieved despite the effects of an extended truckers’ strike in Brazil, one of our biggest markets.’ He said the firm expected sales to rise by 3pc to 5pc for the full year.

Despite it missing expectations, Unilever’s shares rose 3pc, or 127.5p, to 4330.5p yesterday.