Americans' new fondness for frugality prompts P&G to cut prices

It's been a tough decade for debt-laden consumers, and things aren't getting any easier. Rising unemployment, tumbling home values and eroded retirement portfolios have driven many U.S. households to forgo freewheeling spending and instead cut back on expenses whenever and wherever possible.

Consumer-products giant Procter & Gamble has taken note of Americans' newfound fondness for frugality and is doing a little cutting back of its own -- on prices, that is.

Unwilling to bet the bank that consumers will pick up their spendthrift ways once the recession ends, P&G said Thursday it's cutting prices on about 10% of its global product lines.

Rather than leading consumers by the nose, P&G instead is opting to follow their lead. Given the current state of consumer spending, which emphasizes price and value, it is a decision the Cincinnati-based company had to make, said Robert Passikoff, president of Brand Keys Inc., a customer research marketing firm.

"We've seen this shift coming even before the economy went to hell," Passikoff said. "With the economic downturn, more attention has been called to it."