Topline
In its quarterly earnings report released Tuesday, consumer giant Procter & Gamble said it will raise prices on household goods including baby care, feminine care and adult incontinence products starting in September, joining a growing group of companies charging more for brand name products to offset rising commodity prices.
Baby and toddler Pampers displayed in a supermarket store.
Key Facts
Baby care brands Luvs and Pampers fall under the Procter & Gamble umbrella, as do feminine care brands Always and Tampax.
The company didn’t specify the amount of the price increases, but said they would vary by brand and range from mid-to-high single digit percentages.
The company’s chief operating officer said Tuesday that Procter & Gamble is also assessing the impact of rising commodity costs on its other product lines, CNBC reported.
Shares of Procter & Gamble fell 1.8% in premarket trading on Tuesday.
Big Number
$18.1 billion. That’s how much revenue Procter & Gamble earned in the first quarter—slightly above analysts’ expectations.
Key Background
In March, rival company Kimberly-Clark (the maker of Huggies, Pull-Ups and Scott toilet paper) announced price increases for a majority of its products in North America that will go into effect in late June. Like Procter & Gamble, Kimberly-Clark said those hikes were necessary to offset “significant commodity cost inflation.” On Monday, Coca-Cola announced that it would raise drink prices for the same reason.
Crucial Quote
“If the cost of the materials needed to produce a good or service rises (think of the lumber needed to build a house or the electricity needed to power a factory), a business may pass on these costs to consumers in the form of higher prices,” White House economists Jared Bernstein and Ernie Tedeschi wrote in a blog post earlier this month explaining why they expect a short-term bump in inflation as the economy recovers from the effects of the coronavirus pandemic. “We expect global supply chains to gradually unclog as world economies recover throughout 2021 and beyond,” they added.
Further Reading
Here’s Why The White House Isn’t Worried About Inflation (Forbes)
Inflation—Not Covid-19—Is Now The Biggest Risk To Markets, Bank Of America Survey Shows (Forbes)
