Prices of everyday basics like Bounty paper towels and Cadbury chocolate may rise again this year while those of others like Clorox Co wipes and Diet Pepsi are likely to stay steady, as manufacturers make differing bets on the strength of the consumer and their brands.
in the future to recoup margins squeezed by high labor and fuel costs, a whiplash for consumers aiming to make sense of their household expenses.products including Coffee Mate creamers already rose 8.2% last year, with an 11.75 ounce package of its Stouffer's French bread pizza selling for $3.48 at Walmart. Frozen pizza prices have risen about 14% in the last year, according to IRI data.
Price, always a major factor for consumers along with quality, is now becoming even more important, said Mark Hosbein, an executive at consulting firm Magid. Magid's data from surveys shows that consumers are spending dramatically more on groceries, rent and gas, forcing them to cut back on savings and eat out less.
"Consumer sensitivity to prices is going up, even in the last couple months," Hosbein said, adding that data tracked by his firm shows shoppers are becoming less discriminating in what they buy and opting for whatever is cheaper. For example, a shopper who wants blue, 100-thread count sheets but sees cheaper, lower-quality beige ones is now more likely to purchase those, Hosbein said.Brands that retailers and consumers see "core" or "very strong" in their segment also have more pricing power, Ramakrishnan said, because they help build sales for chains.
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