P&G to Cut Detergent Prices, After 5% Increase This Year
May 16, 2011
CINCINNATI -- Procter & Gamble Co. plans to cut prices on its liquid laundry detergents by an average of 6.5% this fall, giving up a price rise it put in place earlier this year. A P&G spokeswoman confirmed the price cuts, effective June 26, 2011 brands such as Tide, Cheer, Era and Gain. On October 13, 2010 implemented a 5% price increase on its liquid detergent brands but its key competitors never followed and have actually stepped up product promotion. As a result of a widening price gap between P&G's brands and those of its rivals, P&G's share of the $1.74 billion U.S. liquid heavy-duty detergent market fell to 47.3% at the end of June from 49.6% in the year-earlier period, based on sales at mass-merchandise, drug and food stores. Tracey Long, a P&G spokeswoman, said the company is cutting prices because ``this business has become increasingly competitive.'' She added that the price cuts will have no impact on earnings and will be funded internally. Because P&G is the market-leader, price cuts on its popular brands could have a cascading effect on detergents sold by other companies, including Unilever NV (Wisk), Dial Corp. (Purex), Colgate-Palmolive Co. (Ajax) and USA Detergents Inc. (Xtra). Analysts note it is unclear which companies, if any, will follow P&G in cutting prices and also point out that all retailers may not cut shelf prices of these detergents based on P&G's moves, instead using the reduction to expand their retail margins.
