P&G at Morgan Stanley Conference Notes

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The Procter & Gamble’s (PG) Management Presents at Morgan Stanley Global Consumer Conference
Jon Moeller – Chief Financial Officer

Growth rates decelerating due to developing markets

“We continue to operate in a challenging and volatile macro environment. Market growth rates on both the volume and value bases are decelerating due mainly to slower growth in developing markets. We entered the year expecting the market to grow close to 4% globally. We now expect 3%. There are more flashpoints across the globe than in anytime in recent memory. ”

Remain comfortable that we can get some growth in 1Q

“we are sitting here on what’s the date, middle of November. And certainly, we had visibility on what’s happened for the first part of the quarter and we remain comfortable that we can get to some level of growth in the first quarter.”

Promotions aren’t the best way to drive sales

“the problem with promotion, particularly when it’s all focused on price; one, its equity destructive, two, there is nothing proprietary about it. As soon as that promotion is out there in the marketplace, the competitor can match it in a nanosecond.”

WMT is largest customer and we are their largest supplier

“we certainly view Walmart as a valued partner. They are our largest customer. We are their largest supplier. It’s a very important relationship.”

The shelves are getting cluttered at many chains

“A number of the retail chains and I certainly won’t name specific chains, but have increased assortment on their shelves by as much as 2X in the last 5 years. And you all know what’s happened to same-store sales growth across most of the retail channels in North America, it hasn’t grown 2X. And so the amount of consumer confusion that’s associated with that complex assortment is inhibiting purchase. You literarily – when I am in stores you will watch a consumer trying to make sense of the shelf and walking away. They just – they literally give up and we are guilty of that sometimes too. We have some of those shelves that we are working to cleanup. ”

We are guilty of over sku-ing some brands too

“we are guilty in terms of having some of the largest brands and having over sku-ed some of our lineups which we are working to reduce. But also, it’s the addition of other brands, it’s the addition of own label brands as well. It’s all of the above.”