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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Can Grocery Now stabilise Unilever shares in 2021?

The Unilever share price is bearish, despite strong sales in certain areas, but is there an upswing on the horizon? With a new structure, innovations, and new streamlining efforts underway, analysts are changing their tone.

  • Unilever share price down 1.53% since last week.
  • Will new grocery innovation stabilise revenue?
  • Are analysts right to change their tone on Unilever shares?
  • Looking to trade Unilever shares? Open an account today

Unilever (ULVR) shares closed at 3,838p on 23 February. That’s a five-day downswing of 1.53% and the latest drop in a year’s worth of losses. Over the last year the stock is down 12.56%. CEO Alan Jope stated in a recent Consumer Analyst Group of New York (CAGY) meeting, that it had been a ‘volatile and unpredictable’ year.

However, ‘strategic choices’ were now being made to focus on 'high growth’ parts of the business. Those areas include homecare, personal care, beauty, and food. Beauty and personal care specifically will see smaller brands separated to achieve better overall performance. These internal changes will be spearheaded by recently acquired brands Dermalogica and Tatcha.

Which innovations will help Unilever shares in the long-term?

The investment believed to offer the most potential in the medium and long-term is Grocery Now. US, India, and China are projected to account for 35% of group turnover by 2030, but Unilever is still looking to build on its already strong base in the UK. Although recent announcements suggest Covid-19 restrictions will end in the summer, consumer psychology looks to have changed for good. According to Public Health England1, food purchases were up 11.1% at the height of the pandemic.

This happened while the ‘number of trips [to supermarkets] had fallen’. Google trends provided by Datawrapper also show that searches for ‘food delivery’ hit record levels in April 2020. With consumers now tuned into the power of home deliveries, the market may have changed for good. Jope is certainly banking on this being the case. The newly formed Grocery Now is a spinoff from Unilever Now, with the aim being to tap into consumer ‘impulse’ needs by offering solutions that allow products, such as ice cream, to be delivered rapidly.

How will Grocery Now stabilise Unilever?

Jope wants to achieve £2 million worth of orders in 2021 and use that as a base to shape the company’s international ventures. This forward-thinking could help the Unilever share price recover. Analysts have been split on Unilever shares in recent months, however, momentum is starting to shift. Off the back of recent announcements, the number of buy ratings has increased.

The Unilever share price target remains fairly modest at 4,708p. However, if Grocery Now proves a success, it may open up new doors. In the short-term, prices may remain ‘volatile and unpredictable', but stability may be on the horizon. An easing of Covid restrictions and continuing vaccine rollouts in the UK and globally could help, as could the introduction of innovations such as Grocery Now. This is likely fuelling the shift in sentiment among analysts, and may suggest Unilever shares are set to rebound in 2021.

Can the Unilever share price rebound in 2021?

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1Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

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