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ยท Posted on
February 21, 2024

Laundry lords Procter & Gamble are raking in cash because it turns out toothpaste and toilet cleaner are always in fashion

P&G's products are essentials, so sales are still going strong.

What's the key learning?

  • Consumer staples are essential items like hygiene products and toiletries.
  • These products still sell well in times of economic turmoil, so companies that produce them can afford to raise prices in line with inflation.

๐Ÿ‘‰ Background: Procter & Gamble have a strong hold on the laundry and consumer care product industries. Think Gillette, Oral-B, Vicks, Ambi Pur and even Head & Shoulders.

๐Ÿ‘‰ What happened: Things are going Ambi Purfectly for P&G ๐Ÿงผ. Sales in its fabric and home care unit jumped 7% in the third quarter, while sales in its healthcare biz (with brands like Oral-B) rose 13%.

๐Ÿ‘‰ What else: Sales growth is at its strongest in 15 years. But prices are also at their highest.

๐Ÿ”” What's the key learning?

๐Ÿ’ก Unlike companies in the consumer discretionary space, those companies in the consumer staples space can afford to raise prices in times of economic uncertainty.

๐Ÿ’ก Unlike 'nice-to-haves' like streaming services, consumer staples like hygiene products are essential. Because of this, companies can generally afford to raise prices without the risk of losing customers.

๐Ÿ’กP&G increased its average prices by 5% last quarter, but still sold 3% more - basically the opposite of what happened to Netflix. It's a balancing act, but Procter & Gamble have shown they now how to play the game so far โš–๏ธ.

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