Consumers may have to pay more for everything from candy to Kleenex amid soaring inflation
Major consumer product makers in the US announced this week they will raise prices more than previously proposed in 2022, announcing the news during post-earnings calls on fourth quarter results.
Household chemicals maker Clorox said on Thursday it would hike prices on 85% of its products by mid-year, planning multiple price increases on a number of products. The company previously planned to hike the costs of only 70% of products.
“We stand prepared to take more pricing [action] if necessary. We want to see how inflation will play out this fiscal year [which ends on June 30],” CFO Kevin Jacobsen said, as cited by Reuters. He added that Clorox is in active talks with retailers regarding the size and frequency of the price hikes, and pointed to an “extreme level of cost inflation” as the reason for the price boost. The firm also cut its full-year earnings forecast, with Jacobsen noting that “it’s going to take several years for us to rebuild margin [to pre-pandemic levels].”
Tide maker Procter & Gamble also plans price hikes on detergents, possibly by the end of the month, the company said this week. In the spring, price hikes on some personal healthcare products will follow.
Chocolate producer Hershey signaled further price increases in the first half of the year, while previously adopted price hikes are to go into effect before March 31. The firm unveiled a somewhat pessimistic forecast for 2022, with executives expecting gross profit margins to drop despite the price increases.
Kleenex maker Kimberly-Clark said last week it will also hike prices amid pulp, labor, and transportation costs increases. The company raised prices four times in 2021.
Moreover, a number of consumer-packaged goods firms have scratched some of their traditional discounts in recent weeks, which also effectively raises prices at the checkout counter. The number of promotions on packaged food products like frozen and refrigerated meals dropped dramatically in January 2022 compared to last year, data from analytics firm IRI shows.
“With supply constraints, there is no point in promoting,” IRI’s head of client engagement, Krishnakumar Davey, said.
Oreo cookies maker Mondelez last month announced “multiple pricing waves” this year, while toothpaste producer Colgate said it will move planned price hikes to the first half of the year instead of the previously planned second half. Colgate CEO Noel Wallace warned that sales will fall across all product categories when consumers realize they have to pay more for the same products.
The plannd price boost comes as firms try to make ends meet amid higher costs on raw materials as Covid-19 pandemic-driven supply chain issues persist. Transportation and labor costs have also surged, pressuring producers further, while supply-and-demand imbalance propelled US inflation, which accelerated to 7% in the last month of 2021, its peak in four decades.
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