Companies raise prices as consumers spend ‘with vengeance’
“It’s definitely been a very, very good constructive price environment that we’ve seen right now, probably the best in recent memory,” Goodyear chief executive Richard J. Kramer said on Feb. 11. earnings call.
The company looks to its competitors when it raises its prices, but they too charge more.
“There are nine competitors we tend to follow, and seven out of nine announced price increases in the first quarter, and one of those who had not increased their prices at the end of last year” , said Darren Wells, its chief financial officer, said on the call. Goodyear saw its profit margins increase last year, thanks in part to price increases.
Estimating Beef Costs
The family of restaurants that includes Outback Steakhouse, Bloomin’ Brands, plans to raise prices by about 5% across all of its brands to cover rising labor and food costs — and, in combining this with efficiency improvements, it manages to increase its profits.
“It became clear that the 3% price we discussed earlier was not enough to offset the heightened inflationary pressures our industry faces,” Bloomin’ Brands CFO Christopher Meyer said of the latest. trimester. “Given that we had not significantly increased menu prices since 2019, we are confident that 5% is appropriate.”
Mr Meyer noted that operating inflation was 4.9% and labor inflation was 8.9% in the last quarter of 2021, but the company had managed to increase its profits improving its efficiency by simplifying its menu and reducing food waste.
In 2022, he said, the company expects beef inflation “in the mid to high age bracket” and wage inflation “in the high single digit range.”