Hitting Connected Society and Cash-Strapped Consumer Headwinds, P&G’s Gillette Slashes Razor Prices
For those of us men that have not fallen in line with the current beard trend, we’ve been bemoaning what have been the escalating price of razor blades for some time. We suspect many women feel our pain as well. As we point out in Cocktail Investing, where there’s a pain point there tends to be a company or two with a solution. Those solutions to high priced razors have included Harry’s and Dollar Shave Club, which have dealt a market share blow to consumer product giant Proctor & Gamble. With consumer fleeing Gillette to lower priced alternatives, P&G has been forced to alter its business model and slash prices. We see this as a classic example of one company hitting a thematic headwind because it did not respond to prevailing thematic tailwinds. In this case, those tailwinds were our Connected Society and Cash-strapped Consumer investing themes.
In the face of increasingly stiff competition, Procter & Gamble will reduce the price of some of its Gillette shave products.
The average reduction will hover in the double-digit range, but some products will be reduced a full 20%. Other products’ prices will remain completely unchanged.
Gillette once claimed a 71% market share in North America, but it now only maintains 59% as of last year, according to Fortune. Startups like Harry’s and Dollar Shave Club — which was acquired last year by Unilever for $1 billion — have steadily chipped away at that dominance with similar razor cartridges at a lower price.
Source: Gillette is cutting the price of its razors by up to 20% – Business Insider
