The world’s largest consumer-products manufacturer Procter & Gamble Co reported a drop in net sales of close to 4% from July-September 2012 over the same period last year.
In light of this, the company has laid out a turnaround plan aimed at regaining market share in key categories, with new products to be introduced and productivity measures to be implemented.
In addition, costs should be cut by $10 billion by 2017, and at the end of this fiscal year, 5,700 jobs will be eliminated.
P&G has had profit from its largest brand Pampers, a baby products brand, fall after a September explosion at its Nippon Shokubai Co factory in Japan. P&G has since been forced to find an alternate supplier.
The company has also been hurt by foreign exchange rates, but it still held or grew market share for businesses that produce 45% of sales. In the US, it held or grew market share for businesses that produce 60% of sales.
Key executives say the company will continue to focus on growth and productivity.
Competitor Job Cuts
P&G competitors Kimberly-Clark Corp. and Colgate-Palmolive Co. also released quarterly reports.
Kimberly-Clark saw profit rise 20% from 2011. Nevertheless, the company plans to cut between up to 1,500 jobs to leave its low margin European businesses.
Kimberly-Clark is best known for manufacturing Huggies diapers and Kleenex facial tissues. The company was not affected by the Nippon Shokubai explosion, and the factory was not a Huggies supplier.
Colgate’s third quarter profit rose only 1.7% from 2011. By the end of 2016, the company plans to eliminate 2,300 jobs, or 6% of the global workforce, in an effort to cut costs and operate more nimbly.
Key Statistics - World Household Products (source: MarketLine)
- In 2010, the world household product industry had a value of close to $170 billion. For the period spanning 2006-2010, this represents a compound annual growth rate (CAGR) of over 3.5%.
- In 2010, the most lucrative segment of the global household product industry was textile washing products. Sales from this segment generated revenue totaling $55 billion, or the equivalent to slightly more than 32% of overall market value.
- For the five-year period 2010-2015, market performance is predicted to slow, with a CAGR of over 3.5% is anticipated. By the end of 2015, the market is expected to be valued at nearly $203 billion.