Two stalwarts of the consumer ecology — Procter & Gamble and Walmart — talked about disappointing recent results yesterday, with its leaders characteristically upbeat about the ways they are addressing the landscape even as it mutates.
“We aspire to be the best,” P&G CEO David Taylor told the Wall Street types assembled at the Consumer Analyst Group of New York conference in Boca Raton, Fla., reports Dan Monk for WCPO 9. “Doing so requires we raise the bar. We know we haven’t been delivering lately, especially on the top line (revenue) and we need to take our standards up.”
The Cincinnati Business Inquirer’s Barrett J. Brunsman points out that the Cincinnati-based advertising bellwether slashed its spend to “$8.3 billion in the fiscal year that ended in June, the lowest level in five years. Ad expenses decreased by more than $700 million, down nearly 7.7 % from nearly $9 billion in 2014.”
“And how did that work out for you?” you may be asking.
“We're investing several hundred million dollars in the back half of this year to increase the reach and consistent delivery of the brand messages and creative communications that ensure our brands are top of mind when consumers buy our categories,” Taylor told the analysts.
P&G is also continuing to promise productivity improvement — $10 billion over five years, says CFO Jon Moeller — and it will recruit more people from outside the company and “do less shifting of executives from brand to brand,” Taylor says and Monk reports.
The “zealous P&G CEO” also discussed Tide Purclean, as David Kellen tells us in Lighthouse News Daily. “Sixty-five percent of the ingredients of this new liquid laundry detergent originate from renewable bio-resources, and the product is manufactured thanks to eolian energy, based on a zero-waste policy, through which all the materials that would normally be discarded are reused instead of being dumped at landfill sites.”
As for its global ambitions, “A recent trip to China was a wake-up call for Mr. Taylor,” writes Sharon Terlep for the Wall Street Journal. “He said he spent time at the home of a 33-year-old mother who doesn’t buy P&G products which she considered ‘old and outdated and not high-end enough.’”
“We looked at China too much like a developing market as opposed to the most-discerning market in the world,” Taylor said.
You’d be right if you guessed that P&G is addressing the issue — it has “introduced a new line of Pampers diapers, complete with ‘Made in Japan’ labels and gold labels,” Terlep reports.
Meanwhile, Walmart says its profits dropped 8% in the fourth quarter and it cut its growth projections for the current fiscal year from 3 to 4% to zip. Even where there was good news, there was a “but.”
“Walmart’s efforts to entice more Web and mobile customers resulted in 8% sales growth for the quarter,” Liz Moyer reports for the New York Times. “But e-commerce sales growth has been steadily declining for the last year, from 17% growth in the first quarter, despite heavy investments in the business.”
By comparison, Amazon’s sales were up 26% in the fourth quarter; 15% in the first.
“While we would have liked to have seen higher e-commerce sales growth this quarter, we continue to make good, foundational progress for the future,” CFO Brett Biggs said on the earnings call.
The retailer “has been working on a massive technology overhaul of everything from its website and mobile apps to backend transaction systems and fulfillment centers since 2012 and expects to spend $2 billion on e-commerce work in the next two years. The goal is to keep pace with customers who increasingly shop across channels,” writes Kim S. Nash for the Wall Street Journal.
Neil Ashe, Walmart’s head of global e-commerce, said that the company “saw ‘strong sales’ on the big days from Thanksgiving to Cyber Monday,” reports Krystina Gustafson for CNBC. “He added that more than half of the company's online sales on Thanksgiving were done on a mobile device, which was double that from the previous year. Ashe also said the company saw a nearly 40% jump in store pickup during the holidays — a lift that was likely a result of it maintaining a $50 free shipping threshold.”
Said Walmart CEO Doug McMillon in a statement: “We are seeing momentum in our Walmart U.S. business as we continue to lap positive comps, and our international business is healthy and growing.” But investors reacted to yesterday’s news “by lopping 3% off Walmart stock, down $1.99 to close at $64.12,” Hadley Malcolm and Roger Yu report for USA Today.