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Shop Talk

Retailers, consumers and prices

October 30th, 2007

Have some more price hikes

Posted by: Brad Dorfman
Tags: Shop Talk

pgproducts1.jpgIt’s not news that consumers are spending more for lots of things they use in their daily lives. Higher raw material costs have jacked up the price for food, toilet paper, milk and tons of other everyday products.

But just to lay the future out in one place, here is the laundry list of upcoming U.S. price increases Procter & Gamble Chief Financial Officer Clayton Daley gave during the company’s quarterly earnings call on Tuesday:
    
    — a 4 to 8 percent increase on coffee, effective this month;
    — a 9 percent increase on fabric softeners, effective this month;
    — a 5 percent to 12 percent increase on Olay and Ivory Personal Cleansing products, effective in January;
    — a 5.5 percent increase on Bounty and Charmin paper products (effective in February);
    — a 5 percent to 8 percent increase on Pampers diapers (effective in February);
    — and a 3 percent to 5 percent increase on blades and razors (effective in February).
    
Of course, P&G isn’t the only company raising prices. Colgate, which also reported earnings  on Tuesday,  said it will raise prices on its Hill’s pet food business by 6 percent to 8 percent in the fourth quarter, due to rising ingredient costs.

And consumers are accepting the price increases without much push back, P&G CEO A.G. Lafley said, noting that lower-priced store brands, or “private-label” products, are losing market share instead of attracting price-shocked consumers.

“We’re taking increases on brands and product lines that in most cases deliver superior performance and quality. So we will see, but they are in line with the kind of increases we have taken in similar circumstances before. And we’re not talking about high out-of-pocket costs or high out-of-pocket prices for consumers here. And we’re talking about staple items,” Lafley said.

(Photo: P&G Web site)

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