L’oreal fails trying to boost sales in the mass market

L’oreal is still fighting for sales growth of products on the mass market. In particular, it relates to shampoos series Garnier, whose distribution does not demonstrate positive dynamics, which negatively impacted the shares of the company, walking her premium brands demonstrated a high income.

In L’oreal sa reported lower-than-expected sales growth. So the growth rate of sales amounted to only 2.3% in the second quarter in the Central segment of the mass market, and the UK, preparing to leave the European Union in March next year, has become the new weak regional market. All this has led to the fact that last week the shares of the leading cosmetic companies in the world fell by more than 4%.

“Obviously, we are not satisfied with the growth of consumer units in the first half, – said General Director of L’oreal Jean-Paul AGON on Friday at a briefing. – We think we have everything we need in order to grow the market, and obviously our ambition is to gradually but in a short time, to achieve growth of 3 to 4 percent.”

Analysts also noted sluggish sales of mass products in the domestic, French market, L’oreal. It is connected primarily with the fact that with fierce competition among retailers and supermarkets. Other markets, such as Brazil and Italy, also have complex situation, but it should be improved, says the company.

As for the British market, Mr AGON said that L’oréal lost market share in the United Kingdom, where it is the consumer, premium and professional products are traditionally sold well. But he pointed to “less stable” sales than a year ago, when a weaker pound at least stimulated the purchase of premium cosmetics.

The Asian market continues to beat expectations, and demand from Chinese buyers were resistant to L’oreal, which is especially important after some of the bottlenecks in trade with the United States. Premium cosmetics and here is a leader in sales.

Overall the operating profit of L’oreal increased by 1.8% compared to the previous year and amounted to 2.58 billion euros (3 billion U.S. dollars) in the first half.

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