Companies across the country are considering hiking prices to offset the surging costs of things like raw materials, energy and transportation.
The purchase price for a slew of products, including lumber and steel, has climbed in recent weeks in the face of supply-chain bottlenecks and pent-up consumer demand. The constraints, which have caused some shortages, are forcing financial officers to make a tough decision: Absorb the higher prices, or pass the extra costs along to consumers?
New data published by FactSet found that 18 of 26 S&P 500 firms in the consumer staples sector said they had already increased the prices of their products – or were willing to do so – in order to counter the recent inflation spike.
Take a closer look at consumer brands you may pay a little bit for this year:
Clorox is planning to increase prices for its Glad products in July – and more increases could come later this year, executives said in April.
"Given the volatility and the increases we’re seeing in the resin market, we’re looking at taking additional pricing in Glad based on what we’ve seen," CEO Linda Rendle said in a call following the company’s earnings report.
During a March 24 earnings call, General Mills executives acknowledged the global "broad-based inflation" currently underway will likely affect net pricing beginning in the fourth quarter.
"We will use all of the tools, and that includes list pricing," the company said. "But it's list pricing, it is price pack architecture. It's how we manage trade and then finally, price and max. But we'll need to use all of those levers."
The Chicago-based company said in April it expects the inflation spike to persist over the next few months and said it had a "variety of levers" to offset the rising costs – including pricing.
Some of the price increases have already been relayed to customers, while others are yet to come.
The beer and wine producer lifts costs about 1% to 2% annually and suggested it would continue to take this approach amid the recent consumer price spike.
Coca-Cola CFO John Murphy told investors during an April earnings call that the company anticipated headwinds from commodity prices in 2021 and 2022.
"We typically look to take pricing in line with inflation," Murphy said. "And I would expect that that principle will continue to be adhered to as we move into the back half of '21 and even into '22."
Kimberly-Clark said in April that it would raise prices on staples like Scott toilet paper and Huggies diapers, with pricing in the "mid to high single-digit range."
Consumers can expect to see most of the higher costs by the end of June.
Miguel Patricio, the CEO of Kraft Heinz, said during a recent interview with Time that the company was exploring the possibility of hiking prices.
"We haven’t increased prices to consumers. We do not know if we’ll have to increase prices or not yet. We are studying and building scenarios on that," Patricio said. "We are very concerned, concerned but acting to mitigate the possibility of increasing prices through efficiencies."
Kellogg officials suggested during a May earnings call that they may increase the costs of things like cereals, snacks and other foods in response to the increase in commodity costs.
Amit Banati, the company's CFO, said Kellogg had a "whole range of levers" to deal with inflation, including "list price increases" and "price park architecture."
The country’s second-largest processor of chicken, beef and pork is raising prices across businesses to offset higher animal-feed costs and other expenses.
"We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year," Tyson CEO Dean Banks said in a statement following the company's most recent earnings report.