[ad_1]
Jay Rushin used to look at global wheat prices quarterly or so. Now he checks every other day.
The CEO of New York staple H&H Bagels, a 50-year-old New York staple, had hoped to reopen its Upper West Side stores last summer, but the toaster he ordered last May won’t ship until February due to a global semiconductor shortage.
When the store opens this week, redesigned as the flagship of the brand Rushin hopes to franchise, live wheat price In response to Russia’s invasion of Ukraine, a key ingredient in bagels — the key ingredient in bagels — surged 35 percent from last year’s levels.
The labor market is also tight increase salaryRushin has raised prices by an average of 5 percent and is looking for ways to cut costs, removing less popular items from the menu, such as grilled salmon, and using software to schedule employees more efficiently.
The challenges facing H&H are plaguing companies large and small across the U.S. as Russia’s war in Ukraine Amplify inflationary pressures from Covid-19.
Inflation rose to a 40-year high, reflected in higher prices for customers, lower earnings prospects for some companies and anxiety among policymakers about the impact on lower-income consumers.
Conagra Brands, maker of Slim Jim meat snacks, warned this week that rising costs of ingredients ranging from chicken to butter are putting it facing an “unprecedented” 26 percent price hike in two years.
Constellation Brands, the company behind Corona beer, told analysts it was paying 17% more for cardboard boxes, 26% more for bottle caps and 35% more for wooden pallets.
Across corporate America, references to “inflation” in corporate presentations in March tripled compared to a year ago, according to data provider Sentieo.
Some companies cited price pressure as a reason to lower profit expectations. FactSet reported this week that more S&P 500 companies issued negative earnings guidance than in any quarter before the pandemic.
Lubricant maker WD-40, for example, said this week that it was raising prices but had to cut its full-year net income forecast by about 2% due to a “challenging inflation environment.”
Meanwhile, Levi Strauss’ fiscal first-quarter results topped Wall Street’s expectations but maintained its full-year outlook amid expectations of more inflationary pressures in the coming months.
Chipberg, CEO, told the Financial Times He knew from doing business in the 1980s that the last time U.S. inflation was this high, prices were raised to raise costs. “You have to get ahead of it because if you don’t, you can’t catch up,” he warned.
So far, the company has been able to pass on most of the higher costs without affecting sales. General Mills, PepsiCo and Kellogg, the makers of Cheerios, Quaker Oats and Special K, all posted double-digit gains as the war between the world’s two largest grain exporters sent grain prices soaring last month, Earnest Research found. price increases.
Even as the Fed tries to tame inflation by raising interest rates, some policymakers have expressed concerns about its undue impact on poor consumers.
Low-income households spend 77% of their income on necessities, more than double what high-income households spend, and many cannot afford to spend 77% of their income on necessities Save money by buying in bulk.
She cites an example of this challenge where the price of a branded cereal and a cheaper store brand has both increased, thus maintaining the difference between them.
“Families who buy name-brand cereals can save money by buying store-brand cereals,” she observes. “However, households that already buy store-brand cereals will have to absorb the increase in cost or reduce consumption to fall into that category.”
A consumer industry chief executive who is grappling with rising resin and pulp prices echoed the concern, telling the FT: “From here, it’s getting tougher for the lower- and middle-end economies. “
as BCG polling Only 40% of investors now expect inflation to return to a more normal level by the end of 2022, down from 60% in January, several executives found, with rapid increases in labor and logistics costs exacerbating commodities price inflation.
Mac Pinkerton, president of North American ground transportation for trucking group CH Robinson, noted that truckers have seen diesel prices increase by $1.50 a gallon within a few weeks.
He estimates that, if sustained, this would amount to $50 billion to $60 billion in additional supply chain costs for the industry, much of which would be passed on to customers.
Logistics costs are also inflated by companies offering higher wages to attract enough drivers to meet demand.Walmart, which said two years ago that its truck drivers make an average of $87,500 a year, raised their starting salary this week so they can Earn up to $110,000 in their first year.
That pressure is forcing companies to adapt. Constellation Brands is hedging more aggressively, Levi Strauss is renegotiating rent, and DIY retailer Lowe’s is optimizing driver routes to control fuel costs.
Others cut their offerings in a similar fashion to H&H Bagels rethinking the menu.
Suppliers have been pushing prices up on more than 170 products, while itinerant nurses’ hourly wages have tripled, said Mike Alkire, chief executive of Premier, a hospital group buying group.
Faced with such pressure, Premier has had to buy in bulk and narrow its offerings, he said: “People used to [ask for] A bedpan of a specific color. Everything is outside the window. ”
[ad_2]
Source link
