July 18, 2024

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Firms raise prices as consumers ‘revenge’ spend

Firms raise prices as consumers ‘revenge’ spend

“It’s really a really very good constructive pricing environment we’ve seen right now, probably the best in recent memory,” Richard J. Kramer, Goodyear’s CEO, said on February 11. earnings call.

The company looks to its competitors because they raise their prices – but they also charge more.

“There are nine competitors that we tend to track, and seven of the nine reported price increases in the first quarter, and one of those that did not raise prices at the end of last year,” Darren Wells, chief financial officer, said on the call. Goodyear saw profit margins expand last year, driven in part by profit margins Rising prices.

The family of restaurants that includes Outback Steakhouse, and Bloomin’ Brands, are planning to raise prices by about 5 percent across their brands to cover rising labor and food costs — and by pairing that with efficiency improvements, they have been able to increase their bottom line.

“It became clear that the 3 percent pricing we discussed earlier was not enough to offset the increased inflationary pressures our industry is facing,” Christopher Meyer, chief financial officer at Bloomin’ Brands, said of the last quarter. “Since we haven’t taken a physical menu price increase since 2019, we’re confident that 5 percent is appropriate.”

Mr. Meyer noted that operating inflation reached 4.9 percent and employment inflation was 8.9 percent in the last quarter of 2021, but the company was able to increase its profits by improving efficiency by simplifying its menu and reducing food waste.

In 2022, he said, the company expects beef inflation “in the middle to high teens” and wage inflation “in the high single-digit range.”

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