Procter & Gamble hikes prices, tries to ease supply chain clogs
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The consumer giant Procter & Gamble announced that it’s going to raise prices on a number of home goods, including skin care products, oral care products and razors. P&G said we can thank rising transportation costs and a shortage of raw materials — problems that have been clogging up supply chains for a while now.
But the company said it’s also doing a lot behind the scenes to mitigate the inflation we’re seeing. That includes identifying backup suppliers, piling up extra raw materials, even reformulating some products with materials that are available.
A lot of manufacturers and retailers have been getting creative, according to Jonathan Gold with the National Retail Federation.
“This includes bringing product in earlier than they normally would, looking at other ports. You’ve certainly seen larger retailers who’ve chartered their own vessels,” he said.
Procter & Gamble said these kinds of strategies can help it control costs. Companies are also trying to ensure that people can even find their products in the first place, per David Marcotte at Kantar Consulting.
“They have to have not only one plan, but two plans, three plans, an alternative, to be sure they can get the product to market,” Marcotte said.
Given the backups at factories and ports, the shortage of truck drivers and everything else that’s clogging supply chains, Wendy Liebmann, CEO of WSL Strategic Retail, said there’s a lot to be gained from store shelves that at least appear well stocked.
“Even if it’s not six deep on a shelf, even if it’s three deep on a shelf,” Liebmann said.
Empty shelves, she said, can erode the public’s confidence in a store and the brand a consumer is looking for. “Especially when you’re in an essential, everyday category, like cleaning products, laundry detergent, paper towels, pet supplies.”
And if those staples aren’t available, Liebmann said, it can even erode people’s confidence in the entire economy.
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