P & P company (PG. It has well -known brands such as Bounty, Tide, Dawn, Crest, and is the world’s largest consumer goods company. Recently, the company has benefited from consumers’ demand for their products slightly.
Procter & Gamble revealed in the second quarter of the fiscal year 2025 that its net sales increased by 2%annually, on the grounds that the organic sales growth of categories such as beauty, healthcare, and family care. The profit also increased significantly compared with the same period last year.
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As P & G benefited from the increase in consumer demand, his chief financial officer Andre Schultten issued a severe warning of the company’s future pricing.
Related: Five major retail chain threats threatened price increases in 2025
Shortly after Donald Trump sworn in the president of the United States on January 20, Trump revealed that he will impose a 25 %tariff on all goods imported from Mexico and Canada from February 1, and levy 10 %of the products imported from China. tariff.
He first mentioned the policy in his campaign speech last year. At that time, he initially vowed to impose 60% to 100% tariffs on all commodities from China, and levied 10% to 20% of tariffs on imported goods from all other countries. Essence
Tariffs are taxes paid by the company from overseas imports. Generally, additional costs will be passed on to consumers, leading to rising prices of goods and services.
Procter & Gamble’s move is quite controversial
In recently, Shulten said with reporters that Procter & Gamble has a manufacturing business in the United States, Canada, Mexico and China to deal with Trump’s tariffs.
Shulten said in the conference call: “No matter what the government decides, we can deal with it.”
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However, he said that the company will first try to cut costs to help reduce the blow of additional expenses brought by tariffs, and may need to take out more money from consumer pockets.
“We cannot offset productivity, but it may lead to incremental pricing,” Schultten added.
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He also said that the company has “formula flexibility”, which means that if the tariff is too high or unable to obtain the product cost, it can adjust the ingredients in the product.
Consumers are frustrated by rising prices
Procter & Gamble may take this move in several financial quarters to increase its product prices at least 1%. The price increase this time is 3.2%of the annual inflation rate in 2024, which brings additional pressure on consumers’ wallets.
Consumers have recently pointed out that Procter & Gamble even reduces the size of some products, but does not reduce the price. This approach is called “shrinking inflation.”
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Procter & Gamble’s response to Trump tariffs is similar to the reactions of several major retailers such as Wal -Mart, Autozone, Best Buy, Dollar Tree and Costco. Essence
The rise in product and service prices may have a counterproductive effect on some companies, because many consumers across the country are tired of rising prices and choose to change their shopping habits to save money.
More retail:
- Dollar Tree issued severe warnings on its pricing
- Foot Locker issued an alert on worrying customer behavior
- Amazon is accused of concealing major changes in Prime delivery
According to a survey of RR Donnelley & Sons CO. last year, 88% of consumers said that they were frustrated by rising prices such as groceries, gasoline and restaurants. In addition, 35%of consumers said that in order to save money, they even bought their own brand store brands instead of famous brands, and 37%of consumers said that they had fewer goods they bought while shopping.
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