Consumers Could See Higher Prices, Less Stock as Materials, Freight Costs Rise
Higher overhead for material, warehousing and freight could leave consumers with sparser supermarket shelves and higher prices for everyday household goods as supply chain and production issues continue to grip the world post-pandemic.
Some of the world’s biggest companies, like Procter & Gamble (P&G), have been able to use their girth to fend off most issues having to do with product shortages due to supply chain snarls, but that comes at a price that will be noticed by consumers, the Wall Street Journal reported.
Read more: Consumer Spending up Despite COVID, Supply Chain Issues
P&G, the world’s biggest manufacturer of consumer goods, with 65 brands across 10 categories, indicated on Tuesday (Oct. 19) that it would be increasing the prices of razors, as well as some beauty and oral care products. The conglomerate already hiked prices on numerous staples, including toilet paper and diapers.
Andre Schulten, P&G Finance Chief said that consumers will largely see an abundance of the supplies they need stocked and available.
P&G executives said the company’s scale, ability to spend on supply-chain fixes and its flexible operations are enabling it to keep products in stock even as consumers increasingly encounter sparse shelves at stores.
The company moved some production to factories outside of Chinese provinces hit by supply shortages in order to keep production up. It also turned to alternate suppliers and shipping routes.
Another corporate giant, Ikea, said shortages haven’t had a big impact on sales since the range of product offerings is so extensive, shoppers can easily pivot. The company has taken an inventory hit, however, as many products sit in warehouses awaiting available trucks.
Albertsons, the second-largest supermarket chain in North America, said that customers are not balking at paying higher prices so far, and for any products out of stock, the grocery store has alternatives available.
During a call with analysts on Monday (Oct. 18), Albertsons CEO Vivek Sankaran said that although there are supply chain problems and shoppers might not find exactly what they’re looking for, shelves are stocked.