Miruna Codeanu

P&G for sell, the death of consumerism?

In Uncategorized on August 5, 2014 at 11:57 am

P1-BQ890_PROCTE_D_20140801180604The multinational corporation P&G said it will be selling to their nonperforming brands. P&G sales dropped by 1% in the last trimester.  P&G will thus focus on its 70-80 core brands which account for more 95% of the profit over the past three years.  P&G holds brands in the following sectors: beauty, baby, feminine and family care, fabric and home care, health and grooming. I’m 90% sure there’s a P&G product at most 10 m away from you. It won’t be those familiar brands they will sell, they will probably sell brands you haven’t heard of, brands you weren’t aware they belonged to P&G.

While everybody is trying to predict which brands will leave P&G’s portfolio, I’d like to know why. P&G says that the reason behind this is that they’re trying to perform better as a smaller company and also because of their 1% fall. Ok, I’m not buying the 1% explanation. No one sells a brand because their sales dropped by 1%  one trimester. Supposedly, that brand appeared due to the faith in its future. Sure, the drop makes it a problem for P&G shares. Also, a P&G spokesman mentioned something about P&G being easier to manage as a smaller company. It seems absurd. The world as we know has proved the corporation to be successful. Yes, but the times are changing and that is increasingly obvious. Who will buy P&G’s companies? Will the corporation make it into the future?

Who will buy the companies P&G intends to sell? Another corporation probably. If we’re talking cosmetics (which I doubt, as P&G’s cosmetic division is performing quite well), L’oreal would probably buy them, everyone else is not doing so well. Chances are, P&G will be selling some of the healthcare brands.

Global corporation shouldn’t be doing so well. There have been some “buy local”/”buy regional” campaigns that should be showing their results. Maybe they are as we speak. Maybe P&G is a consequence of that. Maybe all this is the effect of the sharing economy trend. Maybe “buy local” plus “sharing economy” plus “occupy” plus millenials have results. Remembering I was telling you about how our society is shifting from a show-off consumerism to a more private consumption of goods? Well, yes, that comes along with locally produced goods, niches and so on. The change is gradual, of course, and manifests itself in some layers of society first, and then it spreads. It has consequences in sales, of course. Are we seeing the first symptoms for the death of consumerism?

 

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