OnDemand WTP Pricing Research

U.S. Companies Raising Prices Send Mixed Signals for Inflation | Bloomberg

Strong U.S. demand and a tight job market have given companies a chance to raise prices coming into this year, and they’re testing the waters gingerly.

From consumer goods and airlines to railroads, businesses made attempts to recover higher costs including rising pay for workers, or simply lifted prices to try to boost profit margins amid healthy sales, according to comments on quarterly earnings conference calls. So far, they’ve had mixed success.

Concerns about slowing global growth, higher borrowing costs and rising uncertainty show the environment remains competitive, with companies trying to assess how much they can hike prices without turning off customers and losing market share to rivals. That means little change in the picture for nationwide inflation, which is expected to hold around the Federal Reserve’s goal without any worrisome flare-ups.

Here’s what executives in several industries said about pricing power in the past week:

Consumer Products
Kimberly-Clark Corp., the maker of products including Kleenex tissue and Huggies diapers, has been encouraged by the results of its price hikes even as it braces for slowing sales at some units.

“Our progress in the back half of 2018 with price realization bodes well for our 2019 plan. Given the overall level of pricing we expect to achieve, we’re planning for some negative volume impacts, particularly in consumer tissue,” Maria Henry, chief financial officer, said on a conference call.

At rival Procter & Gamble Co., price increases contributed to revenue gains but the move hurt volumes in segments such as lower-priced diapers. Executives said P&G is ready to adapt as needed.

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U.S. Companies Raising Prices Send Mixed Signals for Inflation – Bloomberg.

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