Consumer demand for cleaning products from Dettol to Lysol provided a pandemic sales surge for Reckitt Benckiser, although the company admitted it is still struggling to keep shelves stocked in “pockets” of the UK and US.
The consumer goods group, which owns brands including Cillit Bang, Nurofen and Durex, beat market expectations with total revenues rising 11.9% to £6.9bn in the first half.
The performance was driven by sales at its hygiene division, with Lysol rising 70% in North America and Dettol 62% globally. Total online sales of Reckitt Benckiser products surged 60% fuelled by stay-at-home shoppers under lockdown.
Laxman Narasimhan, the Reckitt chief executive, said that once the pandemic passes demand for personal and household cleaning products would return to more normal levels.
“There has been quite a seismic shift in how people are living,” he said. “We expect it to continue but not at levels it has been. People are nesting at home, you see that in the number of plates being washed and cooking at home. When the pandemic hit, the lockdown hit, we did see pantry loading. People did go out and buy more than they normally would to make sure the pantry is stocked. But at the end of the day underlying consumption [of cleaning products] doesn’t necessarily change. We are seeing an unwind of that.”
Narasimhan described Lysol and Dettol as “mega brands” with combined sales of more than £4.5bn each year. He highlighted global demand, pointing to a Dettol handwashing challenge campaign run on the video site TikTok in India, which attracted 124bn views.
However, he admitted that while the company has managed to cope with disruption to supply chains during the early stages of the pandemic it is still struggling to keep up with demand in some markets.
“Supply clearly is stronger and we are producing more than what we did in the past, but not enough and we are bringing more on,” he said. “[It is about] ensuring we have the right mix in place so when people walk into a store [our products] are available. Clearly in certain pockets we are still not available to the level we would like to be and that continues to be an area of focus. Certainly some pockets of the UK, which we are working to fix, and certain parts of the US, no question.”
He added that “lower social interactions” during the pandemic, with pubs, bars and clubs shut and the nation social distancing under lockdown, impacted Durex sales.
