Pampers diapers, made by Procter & Gamble, are on display in a dedicated supermarket in New York.
Ramin Talai | Bloomberg | Getty Images
Procter & Gamble It was announced on Tuesday that prices for baby care, feminine care and adult incontinence products will be raised in September in response to higher raw material costs.
The consumer giant is joining a host of other companies, such as rivals Kimberly-Clark and beverage giant Coke, these are Price increases to protect profit margins. Companies are betting that consumers will be willing to pay more for the branded version rather than opting for a cheaper private label. However, this result depends on the economic recovery Coronavirus pandemic and how many consumers will have the money to spare.
P&G said price increases will vary by brand but will range from mid to high single digits.
“This is one of the bigger increases in raw material costs we’ve seen over the period I’ve been involved in it. It’s been quite a long period of time,” Jon Moeller, chief operating officer, told analysts.
After the price increases go into effect, P&G plans to maintain market share by trying to improve consumers’ perception of the value of its products and by introducing new or improved items.
Moeller said at a press conference that the company is evaluating raw material costs and the impact of exchange rates on other categories as well, which could lead to further price hikes across the board. For example, Kimberly-Clark raised the price of its Scott toilet paper due to rising raw material costs, but P & G’s Charmin products were not yet affected.
Shares of P&G more than 1% in midday trading according to the company reported on the results of the third fiscal quarter. The company beat Wall Street’s profit and sales estimates as consumers bought more cleaning products and laundry detergents.