Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

As Retail Prices Rise, Companies Try Not to Say It Out Loud

Stock MarketsJun 09, 2021 12:27PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Bloomberg. Shoppers wearing protective masks shop for produce inside a Costco store in San Francisco, California, U.S., on Wednesday, March 3, 2021. Costco Wholesale Corp. is schedule to release earnings figures on March 4. Photographer: David Paul Morris/Bloomberg

(Bloomberg) -- From clothing to cereal to trash bags, prices are going up fast. But many companies aren’t saying that, at least not in language most shoppers would recognize.

If you ask Pampers maker Procter & Gamble (NYSE:PG) Co., it’s not raising prices, it’s “taking pricing.” Rival Unilever (NYSE:UL), known for Dove soap and Axe body spray, says it’s been “very active with pricing.” The prize for creativity -- so far at least -- has been home-improvement retailer Lowe’s (NYSE:LOW) Cos., whose finance chief told investors Wednesday that it was “elevating our pricing ecosystem.”The euphemisms illustrate the rhetorical backflips companies perform to avoid saying what they’re actually doing -- responding to soaring input and transportation costs, and protecting their profit margins, by making their products more expensive. The makers and sellers of consumer staples notched big stock gains last year thanks to pandemic stockpiling and are now under pressure to maintain that performance even as costs go up, labor markets tighten and they face extremely tough comparisons with last year’s growth.

Those headwinds have cooled their shares somewhat in 2021, with the Standard & Poor’s 500 Consumer Staples Index up just 4.1% this year through Tuesday, and the S&P’s primary retail index up 7%. Those both trail the benchmark S&P 500’s 13% gain.

The price tags consumers see on shelves or online are the result of a complex series of negotiations between vendors and retailers, done behind closed doors, with neither side wanting to sacrifice too much. Retailers sometimes absorb some of the price increases manufacturers demand, and the rest is passed onto shoppers. When prices do inevitably rise, as they’re doing now, manufacturers and retailers both take cover behind neologisms that Wall Street understands, but Main Street sometimes doesn’t.

Package Sizes

Take French yogurt maker Danone, which said it “managed to pass some price” when inflation accelerated. Campbell Soup (NYSE:CPB) Co. said Wednesday that it expects “pricing actions” to take hold early in the next fiscal year.

Then there’s cereal maker General Mills Inc (NYSE:GIS)., whose jargon includes arcane phrases like “strategic revenue management” and “holistic margin management,” which is not language you’d ever find on the back of a box of Lucky Charms. The company uses those terms so often, in fact, that its CEO now just refers to them by the acronyms SRM and HMM. The result is yet another euphemism: “Net price realization,” a term for hiking prices used by many food companies.

Another stealth tactic manufacturers employ is to keep the price of a given product stable, but reduce the package size slightly, thereby increasing the price per ounce.

Corporate doublespeak is not new, of course. For years, layoffs have been referred to as “right-sizing,” “headcount rationalization” or “reductions in force,” and businesses provide “synergy” and “solutions,” not products or services.

Customers, though, might respond to higher prices with a few choice words of their own.

©2021 Bloomberg L.P.

As Retail Prices Rise, Companies Try Not to Say It Out Loud
 

Related Articles

Robinhood sparks buzz on Reddit, shares up 15%
Robinhood sparks buzz on Reddit, shares up 15% By Reuters - Aug 04, 2021 1

(Reuters) -Shares of Robinhood Markets Inc (NASDAQ:HOOD) jumped more than 15% in premarket trading on Wednesday as interest from star fund manager Cathie Wood and small-time...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email