Household names face P&G cull

Shoppers don’t want more choice, says chief executive

The US company’s line-up ranges from multibillion- dollar businesses including Pampers nappies and Crest toothpaste to obscure or fading brands such as Naomi Campbell perfume and Silvikrin hairspray. Photograph: Getty Images

The US company’s line-up ranges from multibillion- dollar businesses including Pampers nappies and Crest toothpaste to obscure or fading brands such as Naomi Campbell perfume and Silvikrin hairspray. Photograph: Getty Images

Sat, Aug 2, 2014, 01:00

The consumer goods industry is offering people more products than they want, Procter & Gamble’s chief executive said yesterday as he announced a radical cull of up to 100 brands.

The move by AG Lafley, one of the most respected consumer goods executives, will send shock waves through an industry that has for years operated on the assumption that giving shoppers more choice encourages them to spend more.

The US company’s line-up ranges from multibillion- dollar businesses including Pampers nappies and Crest toothpaste to obscure or fading brands such as Naomi Campbell perfume and Silvikrin hairspray, which analysts see as likely disposals.

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ariety P&G had insisted under former chief executive Bob McDonald, whom Mr Lafley replaced last year, that consumers welcomed the variety of new scents, flavours and colours that its scientists and marketers pumped out.

But after a year of trying to revive P&G’s flagging financial performance, Mr Lafley called yesterday for an end to the proliferation.

“There is a lot of evidence in a number of our business categories that the shopper and the consumer really don’t want more assortment and more choice,” he told analysts.

L

eadership brands He said that over the next one to two years P&G would divest or discontinue 90-100 of its smallest household and personal care brands, which make up about a

tenth of its revenue, to focus on 70-80 big “leadership” brands.

“We’re going to create a faster-growing, more profitable company that is far simpler to manage and operate,” he said.

The brands that will remain include 23 with annual global sales of between $1 billion and $10 billion.

Mr Lafley would not name the disposal candidates, but he said that there would be few in paper products, feminine care products and nappies. That puts the emphasis instead on haircare, make-up, shaving and healthcare. – Copyright The Financial Times Limited 2104