P&G sees shoppers push back on price hikes
NEW YORK — Procter & Gamble Co., the maker of such iconic household products as Crest toothpaste, Tide detergent and Charmin toilet paper, is seeing shoppers cut back some of their purchases as they push back on price hikes.
The company said Thursday that sales slipped 1% in the latest quarter ended Dec. 31, the first quarterly sales decline since mid-2017. Meanwhile, the number of products it sells globally fell 6% in the quarter — half of that was because shoppers reduced purchases, while the rest was due to inventory productions, the company said.
Profits also fell 7% in the quarter.
Procter & Gamble, like many consumer product companies, enjoyed a sales surge during the height of the pandemic as shoppers stocked up on essentials. And even as consumers faced higher prices on everything from food to rent in recent months, they have remained fairly resilient when it came to essentials like laundry and shampoo compared to discretionary items like trendy clothing. P&G has also made sure to offer lower-priced versions in its portfolio to hold on to price-sensitive shoppers.
But Thursday’s results show that the constant barrage of higher prices on everyday essentials is wearing down its consumers. P&G said it had to hike prices by 10% in the latest quarter and will keep raising prices as it seeks to offset higher costs in transportation, labor and other areas.
Economists and analysts are closely monitoring shopping behavior amid a challenging economy. The government reported on Wednesday that retail sales fell in December, marking the second consecutive monthly decline and the biggest monthly drop for 2022.
P&G executives acknowledged that there’s a lot of uncertainty for 2023, but the U.S. consumer is still intact, and the company upgraded its sales outlook, helped by higher prices.
P&G reported earnings of $3.93 billion, or $1.59 per share, for the quarter — slightly above Wall Street expectations. That compares with $4.22 billion, or $1.66 per share, in the year-ago period.