Eurozone crisis sparks Procter & Gamble warning

The world's largest consumer goods group yesterday issued a profits warning in another sign that the eurozone crisis is afflicting even the strongest businesses.

Procter & Gamble admitted to worse-than-expected sales in "developed regions" such as western and southern Europe.

This follows a similar alert yesterday from France's Danone, the yoghurt giant that owns Actimel and Activa, which said that Spanish customers in particular are cutting back spending.

Procter & Gamble, which owns scores of top brands such as Tide detergent and Ivory soap, lowered its earnings guidance for the current quarter and for the whole of 2013. Sales growth next year is now expected to be 2 per cent to 3 per cent, compared with a previous expectation of 4 per cent to 5 per cent. Net sales for the quarter are expected to be down 1 per cent to 2 per cent. There will also be a hit from foreign exchange rates.

Its chairman and chief executive Bob McDonald is working on a $10bn (£6bn) cost-saving programme that will see the group focus on its most profitable arms.

"We must and we will improve," he said. "We need to be more efficient and more productive."

Mr McDonald wants Procter to have 5 billion customers by 2015. He is under pressure from investors who believe the company is underperforming compared with its rivals.