Here’s an interesting article from Yahoo which discusses brands scrambling to market products in categories where sales have fallen flat. From the story:
For the past three years running, unit sales of consumer products have been largely flat, according to market research firm Nielsen. Procter & Gamble Co., Georgia Pacific Corp., Henkel AG and other companies have responded with a blitz of deals and coupons in conjunction with retailers. Indeed, over a third of packaged food and household products are now sold with discounts, as retailers and manufacturers struggle to get people to open their wallets.
“When we see some of the promotional pricing out there, it’s pretty clear someone has lost their mind,” said Bill Schmitz, a Deutsche Bank analyst who follows companies that sell beverages, household and beauty products.
At Target Corp. stores, shoppers recently could get a $5 gift card for purchases of five Febreze air-freshener products, a discount of more than 30% for a $15 purchase of the P&G brand. This week, the chain is giving a $10 gift card to customers who spend $30 on Angel Soft or Quilted Northern toilet paper, made by Georgia Pacific.
Drugstore chains CVS and Rite Aid last month touted a buy-one, get-two offer for Purex laundry detergent. Henkel, which makes Purex, also distributed coupons for $1.50 off purchases of two bottles. By combining both offers, shoppers could pay a little more than $8 for six jugs of detergent, or $1.35 per 50 oz. bottle.
Some manufacturers, like Church & Dwight Co., bemoan the trend, and worry that the discounts will train consumers to wait for the sale price.
“Price wars don’t help growth and are not good for the industry,” said Jim Craigie, chief executive of Church & Dwight, which owns the Arm & Hammer brands and produces other household products. “They are the easiest things to start, and the hardest to finish.”
P&G and Henkel declined to comment, and Georgia Pacific had no immediate comment. Colgate-Palmolive Co. didn’t respond to requests for comment.
SSMark1 says
I find it interesting nothing was mentioned in that article about many products being downsized to keep the prices from rising. It just says “in part”:
“Prices of consumer goods last year rose by 1.1% on average, in part because retailers—wary of moderating commodity prices—were reluctant to let manufacturers raise prices as much as in previous years.”
I hate 59 oz. size! I miss the 1/2 gallons!!!
And the shrinking of cereal boxes.
The 24 packs of cans going down to 12 & 8 & 6 & 4 packs!!! & now smaller sized cans
Those three have really bothered me these past few years.