Are old-style companies on the way back?
Procter & Gamble has just posted its best quarterly results for 13 years (if you except a $8bn hit for Gillette, of which more later) while Apple, which is beginning to resemble an old style conglomerate as much as a tech giant, seems to have realised a future beyond the iPhone as those revenues now account for less than half its turnover (just – 48 per cent.)
Apple is now placing its bets on video streaming (hardly new tech), credit cards and other services. Elsewhere even Kimberley-Clark is doing better.
P&G credits its current upswing on the ability to raise prices, which used to be one of the main commercial justifications for advertising. And it claims to be spending its ad money more wisely – although the jury is still out on that.
US businesses (including agency groups) are doing better than many in the rest of the world, of course, as President Trump’s ‘America First’ policy bites and its economy outstrips those of other countries, maybe even China if you take Chinese growth figures – down but still high – with a large pinch of salt.
As for P&G’s Gillette it was bound to lose ground at some stage as competitors like Dollar Shave Club and Harry’s threw its stratospheric pricing into even sharper relief. Gillette will remain a challenge for P&G even as it enjoys a tantalising glimpse of the good old days.