Inflation in the United States is at a 40-year high. Everything from daily necessities to luxury items is more expensive now than it was this time last year. In fact, many consumers are seeing higher prices month-to-month. Recently, some major corporations announced that they’ll be raising their prices even more. The multi-billion-dollar corporations are feeling the heat of rising production prices. Corporations like Kimberly-Clark, McDonald’s, and Coca-Cola are looking to raise their prices even more in the coming months.
At a Glance
- Inflation is affecting nearly all consumer products
- Major corporations are raising prices to combat higher production prices
- Many lower-income consumers are having to make hard decisions at the register
Major Corporations Raise Prices to Fight Inflation
Grabbing a burger and a Coke from McDonald’s won’t be quite as cheap in the coming months. In fact, many major corporations are raising prices across the board. As a result, the costs of just about everything Americans buy may continue to climb in the coming months. Companies like Unilever, McDonald’s, Coca-Cola, Kimberly-Clark, and more are planning to raise consumer prices to fight inflation, according to The Daily Mail.
Currently, inflation is impacting the costs of things like crude oil, production, and shipping among other things. As a result, it is getting more expensive for companies to make and ship products to stores. We’re going to have to shoulder the weight of those price hikes.
McDonald’s and Coca-Cola See Mixed Reactions to Price Hikes
Coca-Cola has raised prices on its products around the world. However, Coke CEO James Quincey claims that the Atlanta-based company isn’t seeing a drop in demand for its products. Quincey said that the company has raised its revenue expectations for the year. Earlier in the year, they predicted a 7% – 8% increase in revenue. Currently, Coke expects a 13% revenue growth before the year ends.
McDonald’s, on the other hand, is seeing mixed reactions to its inflation-based price hikes. Lower-income consumers are skipping the burger joint or opting for lower-priced items. However, some higher-income consumers who balk at the inflated prices at classier restaurants are turning to McDonald’s for a cheaper option. This has resulted in a 3% revenue drop for the burger giant. They only made $5.7 billion between April and June.
Inflation Impacts More Than Luxury Items
Sure, there have always been cheaper options than fast food and soft drinks. However, corporations like Unilever and Kimberly-Clark own brands that produce necessities. For instance, Kimberly-Clark owns brands like Cottonelle, Depend, Kleenex, Huggies, Poise, and certain lines of Kotex products. At the same time, Unilever owns over 400 brands that produce everything from soap and other hygiene products to ice cream. The corporation owns Ben & Jerry’s, Breyers, Degree, Dove, Noxzema, St. Ives, Suave, and many more.
Unilever raised prices by more than 11% between April and June due to inflation. The Daily Mail reports that this price hike resulted in an 8.1% sales growth. Alan Jope, Unilever’s CEO said, “The challenges of inflation persist and the global macroeconomic outlook is uncertain, but we remain intensely focused on operational excellence and delivery in 2022 and beyond.”