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Log inAs costs rise, inflation's next front is retailers
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As costs rise, inflation's next front is retailers
by Outspoken on Sun Jul 27, 2008 6:03 pm
As costs rise, inflation's next front is retailers
By ELLEN SIMON
AP Business Writer
NEW YORK - Coming to a store near you: Even higher prices.
Most inflation this year has come from food and fuel, as retailers resisted passing along to strapped consumers the higher prices manufacturers charged them, but coming increases from companies such as Johnson & Johnson and Hasbro Inc. may leave them with no choice.
"While these increases have not for the most part been passed on at the retail level, it is inevitable that they will be at some point," said Dean Baker, co-director of the Center for Economic and Policy Research. "Car dealers and other retailers cannot continue to absorb rising costs at the wholesale level and not pass some of these increases on to consumers."
Sherwin Williams Co. on July 17 announced its third price increase in eight months. The company has been having "difficult discussions" with retailers, Chris Connor, chairman and CEO, said on its quarterly conference call.
The price increases are "well supported with facts in terms of why the company needs them," he said. "Our customers, to the best of their ability, are passing them on."
Hasbro said the retailers it sells to didn't like price increases the company announced Monday "but they recognize that their own private-label costs are going up and they've accepted it."
The increases leave retailers in a bind: They can keep prices steady and cut profit margins or raise prices and risk losing sales.
Wal-Mart Stores Inc. has been in the lead of aggressively keeping prices down, pressuring its competitors to do the same.
"We have seen inflation and we have passed some of that through," said John Simley, a Wal-Mart spokesman. "We have, wherever possible, worked with our suppliers to reduce the inflationary impact as much as possible."
Costco Wholesale Corp. said Wednesday its fourth-quarter earnings would be "well-below" Wall Street estimates of $1 a share as it delays price increases. Stock in rival BJ's Wholesale Club Inc. fell more than 10 percent as investors feared the competitor would have to match Costco's prices.
http://news.yahoo.com/s/ap/inflation_forecast;_ylt=AgWedVfDorqWGjicXc13rLSs0NUE
(AP Photo/Paul Sakuma, file)
By ELLEN SIMON
AP Business Writer
NEW YORK - Coming to a store near you: Even higher prices.
Most inflation this year has come from food and fuel, as retailers resisted passing along to strapped consumers the higher prices manufacturers charged them, but coming increases from companies such as Johnson & Johnson and Hasbro Inc. may leave them with no choice.
"While these increases have not for the most part been passed on at the retail level, it is inevitable that they will be at some point," said Dean Baker, co-director of the Center for Economic and Policy Research. "Car dealers and other retailers cannot continue to absorb rising costs at the wholesale level and not pass some of these increases on to consumers."
Sherwin Williams Co. on July 17 announced its third price increase in eight months. The company has been having "difficult discussions" with retailers, Chris Connor, chairman and CEO, said on its quarterly conference call.
The price increases are "well supported with facts in terms of why the company needs them," he said. "Our customers, to the best of their ability, are passing them on."
Hasbro said the retailers it sells to didn't like price increases the company announced Monday "but they recognize that their own private-label costs are going up and they've accepted it."
The increases leave retailers in a bind: They can keep prices steady and cut profit margins or raise prices and risk losing sales.
Wal-Mart Stores Inc. has been in the lead of aggressively keeping prices down, pressuring its competitors to do the same.
"We have seen inflation and we have passed some of that through," said John Simley, a Wal-Mart spokesman. "We have, wherever possible, worked with our suppliers to reduce the inflationary impact as much as possible."
Costco Wholesale Corp. said Wednesday its fourth-quarter earnings would be "well-below" Wall Street estimates of $1 a share as it delays price increases. Stock in rival BJ's Wholesale Club Inc. fell more than 10 percent as investors feared the competitor would have to match Costco's prices.
http://news.yahoo.com/s/ap/inflation_forecast;_ylt=AgWedVfDorqWGjicXc13rLSs0NUE
(AP Photo/Paul Sakuma, file)
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Plato (427-347 BC)
Plato (427-347 BC)
