Euro Crisis

Unilever Sees a Poorer Future for Europe



It's one thing for economists, pundits and politicians to gaze into their crystal balls and predict the future; they just don't have that much on the line. Sure, they have reputations to maintain, but those don't seem to suffer too terribly even when people are wrong time and again. If Paul Krugman can hold a gig at the New York Times after lo these many years, the consequences for being completely out of touch with reality are clearly not too high. But when people bet real money on their forecasts, you know they have faith in what they see. And what Unilever, the consumer goods giant, sees, is a Europe that's getting poorer.

From the London Daily Telegraph:

Unilever will adopt marketing strategies used in developing countries in order to drive future growth in Europe, as the head of its European business warned that poverty will rise in the region as a result of the debt crisis.

The company behind Persil, PG Tips and Flora said it will apply lessons from its Asian business as consumers change their shopping habits amid a financial crisis that has left Greece mired in recession for the past five years and Spain with the highest unemployment rate in the industrialised world.

"Poverty is returning to Europe," Jan Zijderveld, the head of Unilever's European business told the Financial Times Deutschland in an interview.

"If a consumer in Spain only spends €17 when they go shopping, then I'm not going to be able to sell them washing powder for half of their budget."

Unilever's new strategy is to offer low-cost brands and smaller serving sizes at affordable prices. Affordable even, that is, to the cash-poor Europeans that the British-Dutch company's economists see in the future.

There's no guarantee that Unilever is more right than any of the other crystal-ball gazers, but the company is putting its money where its predictions are.

(H/T: Lord Humungus)