From Breakingviews: P&G charged more in the latest quarter without scaring off too many customers. It’s a good sign, but some of its brands are weaker and costs are rising at a faster pace: alpgomez
Crest and Close-Up toothpastes are seen at the Safeway store in Wheaton, Maryland February 13, 2015.
NEW YORK, Oct 19 - Procter & Gamble , which sells everything from diapers to laundry detergent, offers a lens into how consumers are feeling about their marginal dollar. show a company whose pricing power is hanging on by a piece of floss. That suggests people are about to ditch some of their few remaining small joys, even when it comes to necessary goods.that net sales increased 1% to $20.6 billion, and much of that increase came from jacking up prices. Organic sales, which strip out foreign exchange impacts and revenue from deals, was up 7% mainly because of a 9% increase in charging more.
But P&G’s units aren’t performing equally. Sales grew in three out of five categories, but mostly for things like toothpaste, baby wipes and laundry detergent. Grooming sales fell, while beauty was flat. Together that suggests people aren’t yet ready to give up their favorite brands for daily necessities, but on the margin will forgo them for vanity-related items.On top of that, costs are rising faster than sales, because of input prices for materials and rising transportation fees.
That’s an indication that shoppers’ habits are changing rapidly, and they soon might start pulling back on necessary goods, too, either by buying generic or cutting back on what they use.
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Breakingviews - P&G’s pricing power hangs by a flossProcter & Gamble , which sells everything from diapers to laundry detergent, offers a lens into how consumers are feeling about their marginal dollar. show a company whose pricing power is hanging on by a piece of floss. That suggests people are about to ditch some of their few remaining small joys, even when it comes to necessary goods.
Read more »