Colgate toothpaste display on store shelf in Westminster, Colorado, April 26, 2009. REUTERS / Rick Wilking / Files
March 1 – Get ready for a $ 10 toothpaste tube.
Colgate-Palmolive Co. (CL.N) CEO Noel Wallace told an industry conference last week that the household goods maker sees its new Optic White Pro toothpaste as a premium product, “vital” for its ability to raise prices. which will help increase profits this year.
His remarks come as many consumer product companies raise prices as much as they can to offset their own rising costs, a trend that could continue due to the Russia-Ukraine conflict, whose economic risks include rising gasoline prices. Read more
So far, retailers and consumers appear to be largely indifferent to higher prices. But some lawmakers and consumer advocates say companies are raising prices excessively to boost profits and return money to shareholders.
“We are seeing significant increases in the prices of almost every item that consumers buy,” said US spokesman David Sicillin, who is working on proposed antitrust legislation aimed at reducing prices. “They cause real difficulties. People take things out of their food carts because it’s too expensive.”
In the past, large retailers such as Walmart Inc (WMT.N) have repulsed rising prices. But now retailers like Walmart and Target Corp.
Target said in a profit talk on Tuesday that rising prices are the last lever he pulls when faced with increased costs. Read more
The US Federal Trade Commission has been investigating the incredible prices and supply chain disruptions for the past three months, requiring companies including Procter & Gamble, Kraft Heinz Co. (KHC.O), Kroger Co (KR.N) and Walmart to hand over domestic documents for profit margins, prices and promotions.
Comments on the inquiry are due by March 14 and so far show that small grocers are angry that they need to pay more and receive less important products. Consumers wrote that they could not find oatmeal, cereals and cat food.
In an interview with Reuters, Cicilline cited Colgate as an example of a company that advertises price increases, makes basic items too expensive and pays more to investors.
Colgate expects its margins to increase this year, in part due to higher prices. He also bought almost 50% more shares last year, which is an advantage for investors.
Rising prices are a “key capability” for Colgate that will help boost profits, Wallace said last week.
A Colgate spokesman said in a statement that the company has a wide portfolio of products at various price points and advertised its new $ 10 toothpaste as the first with 5% hydrogen peroxide, with “demonstrated efficacy for teeth whitening.”
Consumer goods companies began raising prices last year in response to rising raw material costs and labor shortages due to the pandemic. Read more
“There is an incredible appetite for our products,” said Katie Dennis, a spokeswoman for the Consumer Brands Association, a trading group for consumer packaging companies, including Colgate. “We do the most important things. And there is no option not to deliver them.”
Prices have also risen on competing private label items, analysts said.
The White House is focused on corporate profits as it fights inflation. Bharat Ramamurti, deputy director of the White House National Economic Council, said there were examples of companies outside the meat packaging industry – which is especially in the White House’s field of vision – raising prices beyond their own expense. Read more
Lindsay Owens, executive director of the progressive nonprofit Groundwork Collaborative, called diapers a low-competitive category, paving the way for aggressive price increases.
The margins of Kimberly-Clark Corp. (KMB.N) declined in 2021 due to rising costs. Diaper maker Huggies is betting that consumers will buy more expensive options made with plant materials, which will help its profits recover, conference executives said last week.
P&G executives said last week that they expect margins to continue to improve as higher prices hit stores. The company also plans to buy back more shares than originally planned. Read more
“Many companies are taking advantage of high consumer demand to keep raising prices when not needed,” said Jack Gillis, executive director of the Consumer Federation of America, a nonprofit group. “As long as consumers are willing to pay these prices, there is no incentive to lower them.”
Report by Jessica DiNapoli in New York; Edited by Leslie Adler and Andrea Ritchie
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