P&G plans ‘major innovations’ as sales growth stagnates

Procter & Gamble says it will launch several major innovations early next year and continue to focus on brand equity rather than price promotion after sales growth in its most recent quarter stagnated.


Net sales for the three months ended September were up 2 per cent compared to a year ago to $21.2bn (£13bn), the same growth rate as the previous quarter.

On an earnings call today (25 October), chief financial officer Jon Moeller teased a “strong slate of innovations” set for launch between December and March in areas including baby products and beauty, although he did not disclose specifics. P&G makes brands including Pampers, CoverGirl, Gilette and Olay.

Moeller admitted that it was “not atypical” to see increased promotions ahead of product launches, adding that there are “certain categories, certain items and certain competitors” where there might be an escalation in promotion in order to be competitive. However, Moeller said that P&G would “rather spend money” on innovation and promotions would “tighten” as it prepares a “slate of strong initiatives”.

“We would much rather invest a dollar in innovation or equity, those benefits are proprietary and sustainable. Promotions there is nothing proprietary about and they are not sustainable.

“It is important we be competitive, but we won’t lead on promotion escalation,” he added.

Moeller’s comments echo those of UK managing director Irwin Lee, who vowed to move away from “unsustainable” value giveaways. They are also in line with CEO AG Lafley’s long-term strategy to improve the efficiency of its marketing activity, including reviewing its ROI measurement and focusing on “value creation”, which he laid out earlier this year.

Moeller claimed that the percentage of sales that P&G moved on promotion was down 7 per cent in the quarter versus a year ago. For the rest of the industry that figure was “about flat”.

Rival Unilever saw underlying sales growth slow to 3.2 per cent year on year.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here