The consumer goods giant Procter and Gamble on Tuesday announced price hikes on feminine care, baby care, and adult incontinence products from September as a response to rising commodity costs. The company joined other companies like Coca-Cola, Kimberly-Clark, (maker of Huggies diapers and Scott products), etc., that already announced price rises to secure their margins.
These companies are confident that customers would pay more for branded versions instead of preferring a cheaper private commodity. But the results will depend on the economy’s recovery from the ongoing pandemic and the number of people having the cash to pay.
The company’s Chief Operating Officer Jon Moeller said, “This is one of the bigger increases in commodity costs that we’ve seen over the period of time that I’ve been involved with this, which is a fairly long period of time.”
A statement from P&G read that the price hikes will depend on the brand and will range between medium to high single digits. The company plans to hold onto its shares in the market by enhancing its products in the customers’ view either by upgrading the items or launching the new ones.
The company’s shares of more than 1 percent were a part of mid-day trades after reporting the fiscal third-quarter values. P&G topped the estimated earnings and revenue of Wall Street as the customers purchased more laundry detergent and cleaning supplies from the company.
COO Mr. Moeller spoke over a press call and said that the company is examining the foreign exchange effects and raw material costs on different categories. He further said that this analysis is likely to lead to more price hikes in the coming days.
This is evident from the incident where Kimberly-Clark hiked its Scott toilet papers’ prices to cope up with rising commodity costs but the P&G company’s Charmin products are yet to face this heat as there is still no impact on them.
The price hikes happen to be the first one after the 2018 significant rises, wherein shoving pulp prices forced an increase in the cost of toilet paper, diapers, and other relevant commodities. The mass blackouts in Texas in February caused the shutdowns of chemical plants, leading to a lack of raw materials, and an increase in their prices to the highest.
Apart from these companies, several other food-making companies like Hormel Foods corporation, J.M. Smucker, etc., also raised their costs. Hormel Foods announced a rise in turkeys from the company, effective from February.