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P&G uses price cuts in effort to boost sales

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The Associated Press

The Tampa Tribune

Published: September 11, 2009

CINCINNATI - The world's largest consumer products maker is finding that "new and improved" is still good but "lower price" is working better.

Procter & Gamble Co., a bellwether of consumer spending, has shifted tactics in the chase for bargain-hunting shoppers, using price cuts, promotions emphasizing value, and even a shakeup of its famed laundry business.

Some economic indicators have implied the economy is improving, but P&G says it's not expecting consumers to start spending freely again. So it's courting the frugal.

After watching sales drop all year as consumers cut spending and bought from cheaper competitors, P&G officials said Thursday they expect sales to rise this fall because of new products, lower prices and more promotions.

The company is cutting prices on about 10 percent of its products, boosting promotions such as coupons and other discounts and making more "value" pitches to consumers.

P&G has a new plan for its laundry business, slashing the price of Cheer by 13 percent next month. Besides market-leading Tide, P&G sells Gain, a fast-growing, lower-priced detergent that has topped $1 billion in annual sales.

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