P&G boss Irwin Lee has slammed the industry’s reliance on price promotions, claiming the trend towards products being sold on deal is damaging innovation.
The UK managing director told the IGD Convention in London today he was “kept awake at night” by the amount of promotional offers, which he said was “ever deepening”.
Lee said he was alarmed that more than 80% of volume was sold on deals, with the average deal now 40%, compared to deals accounting for 66% of volume five years ago, when the average deal was one-third off.
“There is nothing proprietary in price promotions,” said Lee. “We believe promotions win quarters, but true innovation wins decades.”
He said P&G was determined to avoid the promotions spiral, which was sucking “billions of pounds” from budgets better spent on using new online technology to drive better ROI and more effective customer data and marketing.
“We want to harness the power of our innovations, the power of a multi-channel environment, and the power of business intelligence technologies to drive a more sustainable growth agenda.”