LONDON — Unilever, which makes Ben & Jerry’s ice cream, Dove soaps, and Vaseline, announced on Tuesday that it is laying off 7,500 people and spinning off its ice cream division to cut costs and increase earnings.

Unilever, located in London, stated that its ice cream company, which includes Magnum bars, has “distinctive characteristics” from its other brands and would benefit from separate ownership to boost growth. It stated that the separation would be complete by the end of the following year.

Unilever To Cut 7,500 Jobs And Spin Off Its Ice Cream Business, Which Includes Ben & Jerry’s

The British consumer goods company, which employs 128,000 people, has also announced the commencement of a “productivity program” that is projected to eliminate approximately 7,500 office-based jobs globally.

Unilever announced that it will invest in technology to uncover economies and eliminate duplication, which it expects will save 800 million euros ($867 million) over the next three years. The corporation also cut off 1,500 employees in early 2022.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability,” said Hein Schumacher, CEO, who took over as CEO of Unilever in the summer of 2015.

The company’s shares rose more than 3% in late-morning trading on the London Stock Exchange.

“The share price bounce goes some way in reversing what has been a difficult last year, as investors have fretted over a company with limited high growth prospects and in need of streamlining despite its reputation as a solid defensive play,” said Richard Hunter, head of markets for interactive investor, an online investment service.

Unilever To Cut 7,500 Jobs And Spin Off Its Ice Cream Business, Which Includes Ben & Jerry’s

The company behind Hellman’s mayonnaise, Axe fragrances, and Cif home cleaners said it expects underlying sales growth in the mid-single digits after spinning off its ice cream division.

It witnessed sales volume fall 3.6% in 2022 after raising prices by 13.3% on average across its brands that year. In response, it hiked prices by only 2.8% last year, while sales increased by 1.8%.

Some analysts believe that Unilever could benefit from parting from Ben & Jerry’s, which is known for social activity that has occasionally placed it in conflict with its corporate owner.

“A side benefit of the brand exiting Unilever’s portfolio is that it may quieten the ‘go woke and go broke’ noise, but more broadly, the reasoning for the decision appears pretty sound,” said Russ Mould, investment director at AJ Bell, a financial services company.

He stated that the market did not generally anticipate the ice cream split, even if “political pronouncements from Ben & Jerry’s had provoked a meltdown among some investors.”

Ben & Jerry’s has backed liberal causes such as LGBTQ+ rights, Black Lives Matter, migrants’ rights, and initiatives to combat climate change.

Unilever To Cut 7,500 Jobs And Spin Off Its Ice Cream Business, Which Includes Ben & Jerry’s

The company announced that it would stop selling ice cream in the Palestinian-claimed West Bank and contested east Jerusalem in 2021.

Unilever later announced that it would sell its commercial interest in Ben & Jerry’s in Israel to an Israeli licensee, who would offer the items under Hebrew and Arabic labels. In 2022, a US judge denied Ben & Jerry’s lawsuit to block the proposal.

More recently, after the Israel-Hamas conflict began, Anuradha Mittal, Ben & Jerry’s independent board chair, has advocated for a permanent truce in Gaza.

SOURCE – (AP)

Some lower-income Americans are turning away from McDonalds in favour of cooking at home, according to the fast food chain’s chief financial officer, who spoke at an investor conference Wednesday.

“It’s a challenging consumer environment,” said Ian Borden, McDonald’s CFO, stressing that many people are struggling with inflation, rising interest rates, and shrinking savings.

McDonalds Prices Are Up, So Lower-Income Consumers Are Eating At Home

The sting of inflation has prompted Americans to cut back on little luxuries. This includes spending on food at fast-food restaurants like McDonald’s, which traditionally valued value and affordability as major company objectives.

Dining out has become a luxury. According to February inflation figures from the Consumer Price Index, food prices at home rose 1% yearly, while restaurant prices rose 4.5%.

However, the current rise in restaurant pricing has reversed the trend from a year ago, when it was cheaper to dine out. At the time, restaurant costs were up 8.4%, while supermarket prices were up 10.2% year on year.

“Some of those consumers are just choosing to eat at home more often,” said Borden.

To reclaim these customers, Borden stated that McDonalds provides more bang for their money in the drive-thru, including packages priced at $4 or less at 90% of its US outlets.

“We want to make sure the consumer knows what’s available and obviously is thinking of us when they’re making their choices,” said Borden.

McDonalds has also struggled financially on a global scale. For example, the fast-food company has stated that the Middle East’s unrest has impacted regional sales.

McDonalds Prices Are Up, So Lower-Income Consumers Are Eating At Home

Sales in its licensed markets division, which includes most of its Middle Eastern locations, increased by only 0.7% in the fourth quarter, significantly below the growth of more than 4% in the United States and other foreign companies.

Whether a client is shopping for groceries or eating out, prices appear lower than they have been in years since the pandemic began. According to CPI data, food inflation is rising at the slowest rate since May 2021. Grocery store price increases have reached their lowest point since June 2021, while food inflation in restaurants has increased by the least amount since July 2021.

McDonalds Prices Are Up, So Lower-Income Consumers Are Eating At Home

Consumers have also reduced their spending at bargain brand Family Dollar, whose parent firm announced Wednesday that it will close roughly 1,000 locations. According to company leaders, decades of rising inflation have driven customers away, reducing profits and aggravating competition with Dollar General and Walmart. Family Dollar also dealt with years of mismanagement and bad store conditions.

McDonalds stock was down about 3% in afternoon trading.

SOURCE – (CNN)

BUD LIGHT: The world’s largest brewery may have lost up to $1.4 billion in sales as a result of the outcry for its brief engagement with a transgender influencer to market Bud Light beer.

Anheuser-Busch InBev (BUD) reported record revenue for 2023 on Thursday but said its “full growth potential was constrained” by its US division, where sales were hampered by a boycott of Bud Light over a sponsored Instagram post with Dylan Mulvaney.

Bud Light Boycott Likely Cost Anheuser-Busch InBev Over $1 Billion In Lost Sales

In North America, organic revenue considered the strongest measure of operating success, fell $1.4 billion last year as beer sales by volume fell in the area, owing mostly to a drop in Bud Light sales in the United States. Beer generates the vast majority of AB InBev’s revenue.

Bud Light sales plummeted after the company collaborated with Mulvaney in April, which provoked an anti-trans outcry and called for a boycott. The company’s sluggish response to the controversy enraged LGBTQ+ advocates.

The conflagration caused Mexican lager Modelo Especial to dethrone Bud Light as America’s best-selling beer the following month, a status the company had held for over two decades.

Bud Light Boycott Likely Cost Anheuser-Busch InBev Over $1 Billion In Lost Sales

“In the US, performance remains very underwhelming, with revenue down at double-digit rates as the group lost market share,” Aarin Chiekrie, an equities analyst at online investment platform Hargreaves Lansdown, said Thursday.

Better news for shareholders came on Wednesday, when the firm negotiated a tentative agreement with the Teamsters union in the United States, preventing a strike by 5,000 workers scheduled to strike at midnight Thursday.

In addition, AB InBev expressed optimism about the outlook for its US business.

“Our beer market share (in the United States) has seen continued gradual improvement since May through the end of December,” according to the report.

Bud Light Boycott Likely Cost Anheuser-Busch InBev Over $1 Billion In Lost Sales

Meanwhile, shares in AB InBev’s Asia unit, Budweiser Brewing Company APAC, finished nearly 7% lower in Hong Kong Thursday, as shareholder earnings fell due to a one-time customs duty in South Korea.

AB-InBev reported that overall sales volumes in China dropped in the fourth quarter, even though premium brand sales increased by double digits.

SOURCE –  (CNN)