Many companies that have released quarterly results in the past two weeks said they are increasing prices to offset rising costs of labor, raw materials and other inputs. Several large companies have achieved initial successes with their price campaigns.
The steps are coming, as the latest data shows Prices jump to record levels amid economic recovery from Covid Pandemic.
The Federal Reserve believes that inflation will eventually weaken and is largely the result of high demand that outstrips supply when the economy hits the Pandemic starts again. But companies aren’t waiting to find out if the Fed is right and pushing through price hikes that they may not reverse anytime soon, even if input costs go down.
Chipotle hit the headlines in June after they had announced this would die Increase menu prices 3.5% to 4% to increase the average hourly rate to $ 15.
The decision has paid off; the restaurant chain reported second quarter sales that Surpassed pre-pandemic levels, saying it would consider further price hikes across the board if inflation persists.
“There is still a chance that we could take additional pricing action to fill the gap entirely … Let’s see how the menu price continues to be accepted by customers. Really, really good so far. I really don’t see any resistance, “said John Hartung, Chipotle’s chief financial officer, on Tuesday’s conference call.
Whirlpool washing machines for sale in the Airport Home Appl iance store in Concord, California. David Paul Morris | Bloomberg | Getty Images
Household appliance manufacturer Whirlpool increased its prices in view of the higher raw material costs. CEO Marc Robert Bitzer said on Thursday’s conference call that the company has already started to âsee the benefitsâ.
“We are confident that continued strong consumer demand and our previously announced cost-based price promotions are having an impact global delivery bottlenecks and rising production costs, “said Bitzer.
Slim Jims, Pizza and Pepsi
Conagra , the food processing company whose brands include names like Slim Jim and Reddi-wip, reported one strong results from the price increases during the company’s fourth quarter conference call on July 13th.
“We began pricing some of our products in the fourth quarter in relation to the initial inflation we experienced. implement The data from these actions show that we ere elasticities look good so far and we expect more pricing, “says Sean M. Connolly, President, CEO and Director of Conagra id.
Domino’s Pizza , CEO Richard Allison, Jr., on Thursday’s restaurant chain’s second quarter results stated that” pricing is certainly one of the levers “to drive wage increases due to Offsetting inflationary pressures in the labor market.
According to Allison, Domino’s corporate stores have slightly increased their delivery fees and menu prices, and franchisees have the option to do the same in their own business.
Food and beverage giant PepsiCo said it will use its pricing power to offset inflationary pressures.
“Like everyone else, we see inflation in our business in many of our commodities and some of ours r inputs on labor and freight and everything else, “said Ramon Laguarta, CEO of PepsiCo, on the company’s second quarter conference call on July 13th.
” Is there a little more inflation out there? There are. Are we going to calculate prices to deal with this? We definitely are, “added Hugh Johnston, CFO of PepsiCo.
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