Oct 18 Reuters Tide maker Procter Gamble reported a surprise drop in quarterly sales for the second time in a row, as priceconscious consumers in its major markets, the United States and China, switched to cheaper brands.

An uncertain U.S. economy PG39;s growth engine has pushed customers mainly from the lowerincome group to rivals who are offering discounts, and cheaper privatelabel brands.

PG39;s organic sales in North America grew 4 in the first quarter, compared with a 7 rise seen a year earlier.

The consumers aren39;t feeling good out there after the bout of inflation we39;ve had over the recent years, so we need an improvement in sentiment I think for a company like this to do better, said Don Nesbitt, senior portfolio manager at Fm Investments, which has a stake in PG.

Additionally, a prolonged property crisis and rising youth unemployment have resulted in a grim demand environment in China that impacted sales and volumes of PG in the country.

China, as we had expected, continues to be softer from a consumption standpoint … the market continues to be weak and will be weak…for a number of quarters to come, CFO Andre Schulten said, adding that PG, however, has a renewed plan for product launches and category expansions in the country.

PG, which has been reeling in years of steep price hikes with some promotions, reported a 1 rise in average prices across its product categories, and a 1 gain in overall organic volumes in the reported quarter.

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