Unilever’s shares have tumbled after the consumer goods colossus revealed the soft economy is hitting sales.

In an unexpectedly gloomy trading statement, the Anglo-Dutch giant warned that sales of its top brands would rise by 3% in the second quarter and 4% over the whole of 2003. Such expansion is below the 5% to 6% annual increase envisaged under the much-touted Path to Growth strategy.

This five-year scheme, launched in 1999, involves cutting back Unilever’s product portfolio to focus on 400 core brands. Despite the trading statement, the group insists the plan remains “as valid today as it did at the beginning of the programme.”

Unilever is suffering from weak economic conditions around the world and stiff competition in the American laundry and personal-care sectors. In particular, luxury brands such as Calvin Klein have been hit, as has weight-loss drink Slimfast, which is losing out to the US fad for low-carbohydrate diets.

Nevertheless, the group intends to keep advertising and promotion “a level for the year similar to, or slightly ahead of, that in 2002.”

Unilever’s shares on the London stock exchange slid 11% following the update, closing Monday on £4.96 ($8.28; €7.16). Early Tuesday, they fell to £4.89.

Data sourced from: multiple sources; additional content by WARC staff