The Wall Street Journal (WSJ) analyzed on the 14th (local time) that US companies are continuously raising prices of various goods and services in preparation for easing inflation and decreasing consumption. Indeed, some companies appear to be profiting from these price increases.
According to reports, in recent years, U.S. companies have continued to raise prices on products ranging from diapers to handbags. In particular, some companies are emphasizing price hikes to show off their brand power.
The WSJ explained that these companies’ price hikes are due to easing inflation and expected declines in consumer spending due to the economic downturn. He added that the pace of growth in the US consumer spending outlook is slowing, suggesting that the pain of high inflation is mounting.
The US Consumer Confidence Index (a study by the University of Michigan), which indicates consumers’ economic prospects, fell 9% from the previous month.
Companies are concerned about the situation, but plan to continue raising prices.
“It’s getting tougher,” said Joanne Crevoisserrat, CEO of Tapestry, which operates the apparel brand Coach, and said North American sales are expected to decline 4-6% year over year this quarter. . Still, CEO Crevoiserat said he plans to keep raising prices for the products.
According to Tapestry, the price at which consumers buy Coach handbags has increased by about 30% on average over the past three years.
Walt Disney also recently raised the price of Disney Plus, a streaming service, from $7.99 to $10.99. Despite losing some subscribers in the US and Canada, Walt Disney CEO Robert Iger said he plans to increase prices later this year to better reflect the value of the content offering.
More than half of the first-quarter earnings season has passed, and S&P 500 companies’ net profits are recording their first rise after six consecutive quarters of decline, suggesting higher prices are helping to offset increases in costs and other factors, the WSJ said. .
According to the results of a survey of analysts by Factset, a data provider, retailers such as Walmart and Costco, which are scheduled to announce their earnings at the end of this month, are also expected to record higher sales and net profit than last year.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.