People are getting pickier about what they buy in an environment where everything has gotten more expensive. And businesses will only profit if they size and time their price hikes precisely.
People are getting pickier about what they buy in an environment wherehas gotten more expensive. And businesses will only profit if they size and time their price hikes precisely.Leaders from three major consumer brands — Coca-Cola, Unilever and McDonald's — fielded numerous questions on earnings calls today about their pricing strategies.
Alan Jope, CEO of Unilever, parent of 400 brands like Dove, said the company is being "careful not to push pricing levels to a point where we compromise the long-term health of the business." McDonald's has been "taking smaller, more frequent price increases ... to be able to see how consumers are reacting and then adjust if or when necessary," according to CFO Kevin Ozan.Waiting too long to raise prices might force Coca-Cola to do so during a recession, CEO James Quincey hinted.
At the same time, the company doesn't want to "get ahead and anticipate inflation by pricing ahead of it."Shoppers have already turned to generic store brands or turned away from high-priced combo meals in response to higher prices, according to Unilever and McDonald's.Unilever says it expects inflation for its own cost inputs to peak sometime before the end of this year, and that it will "continue to price responsibly" for consumers.
For those at home keeping track of past macroeconomic divas —supply chain issues and unprecedented consumer demand have been dethroned.
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