YIKES! MORE HIKES
P&G is latest to up prices
The maker of Crest toothpaste and Tide laundry detergent said it would raise prices — again — joining a list of US manufacturers passing the rising cost of raw goods onto consumers.
Procter & Gamble said Tuesday the new hikes — that come as some measures of inflation already are stuck at 30-year highs — will cover various health and beauty goods including Gillette razors, Oil of Olay creams and Oral-B toothbrushes.
They follow P&G price hikes this spring on its paper-based products including Pampers diapers, Bounty paper towels and Tampax tampons.
They also follow other manufacturers who, citing rising raw-material costs, also raised prices including Conagra Brands, the maker of Healthy Choice TV dinners and Duncan Hines cake mixes.
And it’s not just the cost of raw goods that’s pushing prices higher. Just this week, grocer Albertsons said higher labor costs and shipping costs would lead to higher prices in its grocery stores.
For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody’s Analytics.
P&G blamed soaring costs for raw materials, a growing pileup of cargo ships at US ports and other supplychain snarls. The Cincinnati-based conglomerate said its costs are rising faster than the $1.9 billion it had forecasted in July.
Now, P&G expects to shell out $2.1 billion more for its fiscal year ending June 2022 on transportation and raw materials, including pulp for its paper products.
“We do not anticipate any easing of costs,” P&G chief financial officer Andre Schulten told The Wall Street Journal. “We continue to see increases week after week, though at a slower pace.”
The inflation rate of 5.4 percent is at a 30-year high as nearly every industry struggles to get goods to the US from overseas and to make products amidst one of the toughest labor markets ever.
Schulten told the Journal that P&G is hiring backup suppliers and changing shipping routes to avoid bottlenecks. It’s also limiting retailers’ supplies of its goods to prevent stores from stockpiling, the company said on an earnings calls.
P&G revenues rose by 5 percent to $20.3 billion, exceeding analysts estimates.
But P&G’s shares closed out the day down 1.2 percent, at $140.66.