The chief executive of Unilever has spelt out the radical steps he has taken to survive the recession, including freezing pay, introducing 30-day action plans "to create a sense of urgency" and replacing 40 of his top 100 managers.

Paul Polman predicted the economic climate would get worse before it improved and said he had shuffled the top team "to strengthen the organisation to make it fit to compete in this environment".

The fmcg giant was approaching the uncertain climate with "realistic optimism", he said, but disagreed with Tesco chief executive Sir Terry Leahy that the worst was over. "I was encouraged to hear Terry say he saw real signs of increased consumer confidence and buying patterns. I hope that's right. For our part, we plan to remain prudent," he said. "We are an industry driven by employment and consumer confidence and unfortunately, neither index is going to show a significant improvement in the near future."

However, people were not cutting spending in every area, he added, citing Knorr stock pots as an example of innovation revitalising a category. The jellied product, promoted by chef Marco Pierre White, had grown the stock category 60% despite being twice the price of a stock cube, he said.

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