Procter & Gamble, the consumer products giant, said that its sales fell for the first time in more than five years, as shoppers pulled back in the face of relentlessly rising prices, the company reported on Thursday.
The maker of household staples, like Tide detergent, Head & Shoulders shampoo and Charmin toilet paper, saw sales fall by 1 percent in the three months through December, versus a year earlier, the first annual decline since mid-2017. Profit also fell for a second consecutive quarter, sliding 7 percent.
Jon Moeller, the company’s chief executive, said the “solid” results came “in what continues to be a very difficult cost and operating environment.”
Many consumer-focused businesses have held up reasonably well over the past year, as shoppers continued spending despite higher prices, bolstering corporate bottom lines. But the latest results suggest that the rising energy, transport and labor costs that companies are passing on to consumers in the form of higher prices are beginning to take a bigger toll. Many shoppers are trading down to cheaper brands or simply buying less.
Procter & Gamble raised prices by 10 percent last quarter from a year earlier, up from a 9 percent price increase in the previous quarter. But sales volume, or the amount of products consumers bought, fell by 6 percent in the latest quarter, twice the 3 percent decline in the previous quarter.
On Wednesday, new data showed that U.S. retail sales fell by 1.1 percent in December, a weaker-than-expected result for the holiday shopping season and another sign that consumers were being squeezed. The S&P 500 fell 1.6 percent as fears of an economic downturn intensified, and futures extended the loss on Thursday morning, sliding nearly 1 percent.
Shares of Procter & Gamble fell more than 3 percent in premarket trading.