{"id":1389,"date":"2024-02-23T13:59:05","date_gmt":"2024-02-23T13:59:05","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/23\/consumers-are-tired-of-price-increases-big-brands-are-paying-attention\/"},"modified":"2024-02-23T13:59:05","modified_gmt":"2024-02-23T13:59:05","slug":"consumers-are-tired-of-price-increases-big-brands-are-paying-attention","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/23\/consumers-are-tired-of-price-increases-big-brands-are-paying-attention\/","title":{"rendered":"Consumers are tired of price increases. Big brands are paying attention."},"content":{"rendered":"
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Until recently, Brooke Benson considered herself a Panera Bread loyalist. For the past 12 years, the 40-year-old Orlando, Florida, resident said she\u2019d make three to four trips there every week \u2014 an estimate her husband said was closer to four or five \u2014 to get her favorite soups.<\/p>\n

But after the outpost of the restaurant chain near Benson\u2019s home raised its price to $8.79 for the same bowl of soup that had cost $7.09 three years ago, she said she was done.<\/p>\n

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\u201cI actually have been looking at soup at all these different places and comparing the prices,\u201d Benson said by text. \u201cI can get better soup in larger portions for cheaper\u201d elsewhere, she said.<\/p>\n

Panera Bread didn\u2019t respond to a request for comment, but several big brands are now acknowledging that inflation-weary Americans are walking away from products and services that keep getting costlier.<\/p>\n

Many companies that raised prices during the recovery from the pandemic cited higher costs for the ingredients, materials and labor needed to provide goods and services that many consumers were racing to buy. Those price hikes, exacerbated by supply chain snags in late 2021, helped push the annual inflation rate to a four-decade high of more than 9% by summer 2022. It has since fallen to 3.1%, meaning prices overall are still going up, albeit more slowly.<\/p>\n

That has put customers in a game of chicken with companies that continue to raise prices.<\/p>\n

McDonald\u2019s recently vowed to focus more on affordability this year, with CEO Chris Kempczinski saying in a recent earnings call that lower-income customers were forgoing the golden arches to eat more cheaply at home.<\/p>\n

Baja Fresh and Wetzel\u2019s Pretzels operator MTY Food Group said last week that same-store sales fell 0.9% yearly across its brands, after consumers responded to higher prices by reining in spending. CEO Eric Lefebvre said the company would be able to make only \u201cvery minimal price increases\u201d as a result.<\/p>\n

\u201cWe need to make sure we don\u2019t push the customers away,\u201d he said on an earnings call.<\/p>\n

General Mills similarly cited \u201ca continued challenging consumer landscape\u201d as sales in its pet food businesses, including the Blue Buffalo brand, fell 4% on a yearly basis. The company admitted it had overestimated customers\u2019 willingness to pay higher prices for dog treats.<\/p>\n

\u201cPeople [are] trading down to less expensive treats \u2014 if they\u2019re still treating,\u201d CEO Jeff Harmening told analysts in December.<\/p>\n

Kraft Heinz, the maker of iconic mac-and-cheese and ketchup brands, reported a 7.1% decline in yearly sales, suggesting it was hitting the limit of how far it could hike prices before customers cut and run. The company raised prices by 2.5% across its product line over the course of 2023, after doing so by 14.2% the previous year. CFO Andre Maciel told analysts last week that Kraft expects to lift prices by only about 1% this year.<\/p>\n

Home Depot said Tuesday it was planning for 2024 to be \u201ca year of continued moderation,\u201d as customers reduced their average spend by 1.3%. The company said shoppers are less excited about big-ticket purchases after a home-renovation frenzy early in the pandemic.<\/p>\n

Some companies that have raised prices less aggressively over the past year were rewarded. After raising prices for its burgers by 7% in October 2022, Shake Shack increased them just 1% in October 2023. It said same-store sales jumped 2.8% over the course of the year, and traffic grew by 1.4%.<\/p>\n

Walmart has been trying to lower some of its prices to cater to budget-conscious consumers, with clear results.<\/p>\n

\u201cWe took our French bread back to $1, which had been $1 for a long time and went up as inflation hit the market,\u201d Walmart U.S. CEO John Furner told investors Tuesday. The price had jumped to $1.47 before the cut. \u201cWe\u2019re seeing results of that running about 40% over last year, so customers immediately responded,\u201d Furner said.<\/p>\n

He added that the retailer has sliced $1 off the price of rotisserie chickens as well.<\/p>\n

Businesses\u2019 wholesale costs for many raw materials, contracts with suppliers and other \u201cinputs\u201d are still elevated, with a closely watched index of those expenses recently posting its biggest increase in five months. That makes it unlikely consumers will see brands making deep price cuts across the board anytime soon, analysts say.<\/p>\n

Even so, many companies are now more inclined to \u201cswallow some of the cost increases\u201d they\u2019re shouldering, rather than pass them on to consumers completely, said John Zhang, a marketing professor at the University of Pennsylvania\u2019s Wharton School.<\/p>\n

That\u2019s already eating into profits for companies that sell essential and nonessential goods and services alike. To protect them, Zhang said, many brands are expanding the range of price points they offer shoppers. That could mean promoting higher-margin premium products for wealthier customers (such as the Double Big Mac) as well as stripped-down basics for more cost-conscious ones (like ad-supported Netflix).<\/p>\n

\u201cIf you want to maintain your image, if you want your customer to still like you, you need to offer the customer more options,\u201d he said.<\/p>\n<\/p>\n

This post appeared first on NBC NEWS<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Until recently, Brooke Benson considered herself a Panera Bread loyalist. For the past 12 years, the 40-year-old Orlando, Florida, resident said she\u2019d make three to four trips there every week \u2014 an estimate her husband said was closer to four or five \u2014 to get her favorite soups. But after the outpost of the restaurant […]<\/p>\n","protected":false},"author":0,"featured_media":1390,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1389","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1389"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/1390"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}