The enduring appeal of scruff is turning out to be a bigger challenge to Procter & Gamble’s (PG)Gillette than the grooming brand’s recent controversial ad that called for better male behavior.
Gillette, which P&G bought for $54 billion in 2005, continues to struggle to keep its dominant market share in men’s grooming from newer brands like Harry’s and Dollar Shave Club. Add to that the cultural trend that sees more men rocking beards or waiting longer between shaves and you have a business under chronic pressure. While P&G reported a generally strong quarter, sales fell 3% in its grooming business. “The biggest impact is the societal impacts and incidence of shaving both here and in Europe,” P&G CFO Jon Moeller told Wall Street analysts on Wednesday. “If you just purchased a package of 12 razor blades from us or from somebody else, we probably won’t see you in that category for a year.”
Two years ago, to keep pace with rivals, P&G slashed the prices of many Gillette blades, a move that has stanched the loss of market share and one that Moeller said was the right one. “Has it been effective in terms of stabilizing our share position? Yes,” Moeller told one analyst.
Though the fiscal quarter for which P&G reported ended before the launch of Gillette’s “The Best Men Can Be” campaign, there has been no hit to sales thus far in light of the social media storm the ad spark. The commercial called on men to embrace a new kind of masculinity, a message well received by many but seen as an unnecessary scolding by others. But as with other controversies involving a major brand—think Nike with Colin Kaerpernick last year or Starbucks and gun safety a few years ago—noise and threats of boycotts haven’t translated into a hit to sales.
“Retail sales trends are in line with pre-campaign levels,” Moeller said, and the CFO pointed to “unprecedented” levels of media coverage and consumer engagement.
At the same time, P&G expects its grooming business to return to growth for the rest of the year, helped by the launch of Skin Guard in North America and Europe and getting more men to join its shave club.