Cincinnati financial experts say P&G is protecting profits, because the price of production is rising. It costs more to make and transport the raw materials used in the process. Plus, supply chain backlogs and a truck driver shortage are slowing down deliveries.
Bahl & Gaynor’s Jim Russell says inflation and labor shortages will force some companies to raise wages. However, that will not apply in industries across the board.
“Wages are not keeping up for some people out there, and that will prove to be a difficult period for them,” said Russell. “While we think inflation will moderate, perhaps, early next year, it’s not guaranteed. And I do think for the time being, call it for the remainder of this year, and, perhaps, into early next year, that prices will remain on the elevated side of the equation.”
This is P&G’s second price hike this year. In September, shoppers began noticing the price of items like diapers and feminine hygiene products increasing.
P&G says to expect the prices to go up around 5%. Though it’s still early, the company said it has yet to notice consumer behavior changing in reaction to the higher prices.
“It’s just going to change how much we have for other things,” said Rohlfer.
The Associated Press contributed to this report.