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Huggies on display at an Albertson grocery store in Dallas, Texas.
Jason Janik | Bloomberg | Getty Images
Kimberly-Clark said on Wednesday it would raise the prices of staples like Scott toilet paper and Huggies diapers, joining the growing list of consumer products companies that are raising prices.
Higher commodity costs are putting pressure on corporate profits, but cash-strapped consumers who are still reeling from the impact of the coronavirus pandemic could opt for cheaper private label products in place. In February, the unemployment rate was 6.2%, according to the Ministry of Labor. Consumer products companies are also starting to double their rising sales sparked by last year’s inventories, and many analysts predict sales to decline as more consumers get vaccinated and revert to pre-pandemic habits. .
Prices for most of Kimberly-Clark’s North American products will rise mid to high, and consumers can expect to see most of the higher price stickers by the end of June. The affected business segments include infant and child care, adult care and Scott toilet tissue. If rival Procter & Gamble follows their lead, consumers could also see higher prices on Pampers diapers and Charmin toilet paper.
Kimberly-Clark shares rose more than 1% in morning trading. The stock climbed 10% last year, giving it a market value of $ 47.6 billion.
JM Smucker was among the first to raise prices as commodity costs hit profits. The company raised the price of its Jif peanut butter in August as peanut yields fell and its competitors followed suit.
“In this case, and especially in peanut butter, it was very clear that we were under cost pressure and we could demonstrate it to our business partners, etc.,” CEO Mark Smucker told analysts in November.
General Mills CFO Kofi Bruce said during the company’s March 24 earnings call that it is taking action now and in the coming months to raise prices. The company fell short of Wall Street estimates for its third quarter tax results, due to rising raw material costs. The upcoming price hikes would benefit its results for fiscal 2022, which begins in late spring.
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