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As expected, Procter & Gamble yesterday announced that it would “boost its offerings of lower-priced products, signaling an important shift in its cherished strategy of introducing increasingly sophisticated -- and increasingly costly -- household staples,” according to a story in the Wall Street Journal.

CEO A.G. Lafley said at an investors conference yesterday that the company would fight back against the gains being made by private label brands by insuring that “every business at P&G is working to reach more consumers by widening the price range of its products,” the Journal writes. “He cited the recent success of the company's bargain-priced Gain detergent and Luvs diapers. In recent quarters, both products have outpaced the sales gains of their premium-priced sister brands, Tide and Pampers.”

"You have to see reality as it is," Lafley said. "In every recession there are hosts of compensating consumer behaviors as they manage a more modest budget. We have to expand our portfolios to serve the needs of those consumers. I think a lot of that is going to last."

However, Lafley emphasized that super-premium products would continue to be a part of the P&G portfolio. "The whole game for us is to manage the premium and super-premium segments in a way so we can deliver affordable entry offerings...in a way that grows revenue and margins," he said.

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