Procter & Gamble gets big lift as Americans continue their clean-freak ways
Americans doubled-down on buying cleaning products during the autumn and there is little sign they are anywhere close to losing their pandemic-induced clean-freak habits anytime soon, judging from Procter & Gamble’s latest financial results.
The consumer product giant said on Wednesday that overall sales rose 8% to $19.7 billion in the last three months of 2020. Notably, within that rise was a 30% jump in consumer demand for home cleaning products during the pandemic and new products that P&G’s finance and operations chief Jon Moller ascribed to “more time at home, more meals at home” and that also helped it command higher prices. The quarter coincided with a big new spike in COVID-19 infections in the U.S. and other major markets.
Americans, Moeller noted, are cleaning and sanitizing 30% more often, using their dishwasher 15% more, and using air fresheners and paper towel usage more, too. But Moeller suggested that the spike in demand would likely be long-lasting even once the pandemic finally eases, something the new U.S. president, Joe Biden, said on Wednesday would be a top priority.
“We will serve what will likely become a forever altered cleaning, health and hygiene focus for consumers who use our products daily or multiple times each day,” Moeller said on a conference call with Wall Street analysts.
While P&G has not had a product become a cultural touchstone during the pandemic like rival Clorox’s namesake wipes, its products like Microban 24 and Safeguard sanitizer are also meeting outsized demand.
Another thing that helped P&G: consumers’ willingness to pay more for household items. Spending by more affluent consumers is holding up much better in the economic slump, and absent things like travel or fashion to spend on, they are diverting more of their consumption to cleaning products, and other hygiene-focused products, including the $300 Oral-B iO electric toothbrushes by P&G. Sales of power brushes were up 20%, Moeller said.
Another way P&G is leveraging this new consumer behavior: it has been ramping up laundry-detergent pods designed for extra-large washing machines.
On the basis of the strong quarter across its many categories, the maker of Tide detergent and Gillette razors raised its estimate for full-year organic sales growth to between 5% and 6%, up from a previous range of 4% to 5%.
But that came with a caveat that the current boom was not guaranteed. “If anything, the level of certainty is less today than it was” at the beginning of the pandemic,” Moeller said.