Deepening price war weighs on P&G and puts ad budget under pressure
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Its skirmishes are looking more like a broader price war for Procter & Gamble Co., fueling relatively weak 1 percent organic sales growth for the packaged-goods giant last quarter.
In previous quarters, P&G’s organic sales and unit volume grew at about the same pace. But this quarter unit volume grew 2 percent, twice as fast as organic sales, which exclude the effect of currency, acquisitions and divestitures, with lower prices reflecting the difference. P&G’s shares were down almost 4 percent in Thursday afternoon trading.
Lower prices haven’t led P&G to cut overall marketing spendingyet. Like prior quarters, P&G continued to cut agency and production costs last quarter, but Chief Financial Officer Jon Moeller said on a media call that overall marketing spending was up 1 percent, reflecting increased media and sampling.
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