When prices went up Jen Psaki told us it was good, because that meant people were buying things.
Then the news broke that consumer spending didn’t match the rate of price increase, which is direct evidence of inflation.
So now the story had to change.
Now the story is “companies are raising prices with illegal gouging.”
Wondering why your Thanksgiving groceries cost more this year? It’s because greedy corporations are charging Americans extra just to keep their stock prices high. This is outrageous. https://t.co/ZGhL7c3piR
— Elizabeth Warren (@SenWarren) November 24, 2021
It’s clear Senator Warren expects people not to read the article she Tweeted.
Consumer products companies — the ones that make most of the stuff we buy on a daily basis — are posting strong profits this earnings season, even though labor and supply-chain difficulties are making things more expensive.
Prices for businesses are up more than 8% over the past year, according to the US Bureau of Labor Statistics, adding pressure to their bottom lines.
“What we are very good at is pricing,” Colgate-Palmolive CEO Noel Wallace said. “Whether it’s foreign exchange inflation or raw and packing material inflation, we have found ways over time to recover that in our margin line.”
Unilever, which owns a staggering number of household brands, reported that while the number of sales dipped slightly across several of its major segments, it was still able to grow profits by raising prices by roughly 4%-5%.
“Consumer-facing price is the last lever we normally use to manage inflation,” Unilever CFO Graeme Pitkethly said before describing how they did it: “We find that taking several small price increases is more effective than one large price jump.”
Some of the retailers that sell many of those companies’ products also weighed in on their buck-passing ability.
“We’ve been very comfortable with our ability to pass on the increases that we’ve seen at this point,” Kroger CFO Gary Millerchip said. “And we would expect that to continue to be the case.”
“We’re trying to keep prices down,” CEO Robert J. Gamgort said. “We’re only passing on the coffee costs because they are excessively high.”
“We have leaned on productivity because it’s available to us much more than pricing because it’s the right thing to do for the ecosystem of Keurig,” he added. “I recognize that concept is very different concept than traditional CPG.”
A key reason companies are able to succeed with these hikes is that so many of them are doing it. If only Unilever charged more, that could drive shoppers to choose an offering from Colgate-Palmolive or P&G.
When all of them do it, you don’t have a choice.
So company costs are up 8% but they’ve only risen prices 5%, and the CEOs admit that they don’t want to raise prices because it scares off customers, but they have no choice because of increasing costs, and only because the entire market is being hammered so hard is it possible because everyone’s prices are going up.
That seems to be exactly the opposite of what Warren is alleging, that companies are engaged in an illegal price fixing scheme to screw consumers.
But they are going to push this because it’s easier to drag a bunch of CEOs in and berate them with Leftist talking points than admit they fucked the market to death with inflation and shutdowns.
We’re turning into Weimar Germany and they are going to keep going with their bread and circuses.
We’re so, so, so very fucked.