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Diapers, cereals and yes, toilet paper become more expensive

Retailers used to capture a large part of the shopping cost when suppliers increased prices. Now the difference is passed on to buyers.

General mills, the manufacturer of Cheerios, is over increased costs, his Chief Executive told analysts. Recognition. Getty Images

  • April

Procter & Gamble raises prices on articles such as Pampers and Tampax in September. Kimberly-Clark said in March that it will take a step on Scott toilet paper, Huggies and pull-ups in June, which is "necessary to support a significant raw material cost inflation."

and general mills that produce cereal brands, including Cheerios, is "in this higherest environment" with increasing supply chain and freight costs, "said the Chief Financial Officer of the company, the Chief Financial Officer of Kofi Bruce, on a call with analysts .

These price increases reflect what some economists call a great shift in the way companies have responded to demand during the pandemic.

Before meeting the virus, the dealers often tailored the costs as the suppliers increased prices on goods as a stiff competition forced retailers to keep prices stable. The pandemic changed that.

It created chaos and confusion in the global shipping markets, which led to mangensence and price increases, which are cascaded by factories at ports in consumers. When the pandemic met, the Americans' shopping habits were moved rapidly - with people who expend money for treadmill and office furniture rather than eating in restaurants and watching films at theaters.

In turn, put a tremendous pressure on the factories in China to produce these goods and bring them into containers over the Pacific. However, demand for shipping is the availability of containers in Asia, which gave bottlenecks that led to higher shipping costs.

Consumer price index, the measure of the average change in prices paid by the US buyer for consumer goods increased by 0.6 percent in March in March, the largest increase since August 2012 after the Bureau of Labor Statistics.

Higher costs not only influence the United States. British inflation hit 0.7 percent in March, driven by the prices of oil and clothing.

At the beginning of the Covid-19 crisis, companies focused on reacting to the increase raised by panic purchases, with people working on objects such as toilet paper, cleaning accessories, canned foods and masks, the Greg Portell, a partner at Kearney, a consulting company. The government observed that the price range is pressed, and customers were careful to be used.

"If the pandemic hit paper first, toilet paper was like gold," Portell said. "The appearance of the experiment to take a price increase during this time was just not good."

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Despite the sponsoring tip, companies were unable to compensate for the price and cost equation. Now that the economy has stabilized, the companies begin to create various economic calculations, the prices for the re-balancing, so that they fits better in their profit advertising and the inflation takes into account what the prices will create.

"This is not an opportunist profit with company," said Portell. "This is a reset of the market."

The pump of the government of money into the economy through recent stimulus packages has also provided retailers more space for the prices. People who have received unemployment benefits or stimulus checks can spend this money for consumer goods such as toilet paper and diapers.

Many of those who kept their work during the pandemic could also increase their savings. That is, you have a available income to spend more expensive items such as printers or desks for work from home or luxury such as televisions, whirlpools or kitchen reserves.

"At the moment, demand is tax-stimulated and very strong," said Gregory Daco, Chief & Economist for the company Oxford Economics. "So, even if you increase your prices, you will not necessarily lose the market share, as most other producers do the same thing and because people have the opportunity to buy."

It is likely that retailers, from Big box transactions in grocery stores, will be passed on the majority of increased costs of suppliers to consumers.

"The consumption is probably very strong in the next few quarters, which enables companies a bit more award winners to enforce some of these cost increases, which may otherwise need to absorb in their edges," said Tim Drayson, Economic Leader on Legal and General Investment Management , An asset management company.

However, companies still need to consider the price increases and be appropriate with the competition.

"Businesses tend to pass on what consumers, the stomach," said John Ruth, Chief Executive of Build Asset Management, an investment advice. "You will notice a few price increases, but your hamburger will not doubled in your local favorite drive."

Price increases for necessities such as toilet paper and diapers affect the Americans with low income, which are profoundly the deepest and an additional burden on those who have already hit hard from the pandemic.

Whether the increased prices are liable, or after all, is a topic of the debate between economists. Some predict that prices will be normalized within one to two years, as the economy will continue to steam, improving the labor market and those who have lost jobs during the pandemic are increasingly returning to work.

"People are not used cars or even new cars, forever," said Daco. "At some point the demand is saturated, and that will be the beginning of an environment of the reduced price."

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