According to a report released on Jan. 22 by Procter & Gamble Co. (P&G), inflation for essential consumer goods continued to ease in the past three months.
“This suggests that inflationary pressures for both the average American and P&G have abated, at least for the time being,” Ryan A. Hughes, founder and portfolio manager at Bull Oak, told The Epoch Times in an email.
“We don’t quite know whether this is due to accelerated price hikes over the past few years or if pricing pressure has eased for P&G. Either way, I think it is safe to say that pricing pressure has eased for now.”
Georgios Koimisis, an economics and finance associate professor at Manhattan University, found P&G’s recent price changes to be modest and below the U.S. inflation core inflation rate.
“Some categories had slight price increases, while others kept prices stable or reduced them slightly,” he said in an email to The Epoch Times. “This suggests that P&G handled inflation by cutting costs and improving efficiency instead of raising prices significantly, maintaining affordability and competitive positioning.”
Consumers welcomed this situation and responded accordingly, Koimisis said after analyzing P&G sales by product category.
“Categories with small price increases (beauty & health care) still saw steady demand, showing that people kept buying despite higher prices,” he said.
“For products with stable prices (fabric & home care), sales grew, showing the benefit of competitive pricing.
“In categories where prices were lowered (Baby, Feminine & Family Care), sales increased even more, showing that consumers in these areas were price sensitive. Overall, P&G’s pricing helped drive sales while keeping products affordable for customers.”
Jon Moeller, chairman of the board, president, and CEO of P&G, commented on the organic sales growth following the release of the company’s financial report.
“The P&G team delivered an acceleration in organic sales growth, core EPS growth, and strong cash return to shareowners in the second quarter,” he said. “Our first-half results keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year.”
Zain Jaffer of Zain Ventures interprets P&G’s sales growth in another way—that the company sells essential must-have items.
“P&G consumer and personal care goods are not discretionary and expensive items for most American households,” he told The Epoch Times via email. “No family wants to run out of toothpaste, soap, and shampoo, although discretionary items such as skin/personal and baby care were slightly down.”
The P&G report shows that inflation does not affect essentials such as food, toiletries, electricity, and rent, according to Jaffer.
“It affects discretionary expenditures more like travel, decisions to buy/invest in new real estate or assets, and others,” he said.
Marko Bjegovic, a macroeconomist and founder of Arkomina Research, interpreted the current trend as P&G losing its pricing power.
“If we look at how much higher prices drive total sales, this metric is down to [zero percent] in Q2 FY 2025 (calendar Q4 2024) for the first time since Q1 FY 2019 (calendar Q3 2018),” he told The Epoch Times in an email.
“Although it may not seem that way, P&G’s pricing power lags inflation. The mentioned metric hovered around [1 percent to 2 percent] from FY 2019-Q1 to FY 2022. The latest P&G report suggests that price stability is achieved completely because P&G, as one of the key consumer staples companies, no longer has any pricing power left.”
Nevertheless, the company’s leadership is optimistic about the future.
“We remain committed to our integrated growth strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority—across product performance, packaging, brand communication, retail execution, and consumer and customer value—productivity, constructive disruption, and an agile and accountable organization,” Moeller said. “This strategy has enabled our solid results and is a foundation for balanced growth and value creation.”
Hughes sees challenges ahead, such as potential tariffs on U.S. imports, which might make companies manufacturing goods overseas less competitive.
“At what quantity levels will P&G import raw goods from foreign countries?’ he asked. “If so, which country and which goods will face tariffs? At this stage, it is almost impossible to forecast the financial impact. Since P&G manufactures many of its goods here in the U.S., this might be a favorable development for them compared to their competitors.”
