The maker of Crest toothpaste and Tide laundry detergent said it would raise prices — again — joining a list of US manufacturers passing the rising cost of raw goods onto consumers.
The move by Procter & Gamble comes as some measures of inflation already are stuck at 30-year highs — signaling there’s still no end in sight for rising prices.
P&G said Tuesday it would hike prices on a host of beauty, oral care and grooming goods, which include Gillette razors, Oil of Olay creams and Oral-B toothbrushes.
That’s after warning this spring that it would be forced to hike prices on its paper-based products, which includePampers diaper, Bounty paper towels and Tampax tampons.
Other manufacturers have flagged the rising cost of the raw materials that go into making finished products as a reason for increasing their own prices: Conagra Brands, the maker of Healthy Choice TV dinners and Peter Pan peanut butter, said it over the summer would raise its prices as the company faced “substantial” inflation.
And it’s not just the cost of raw goods that’s pushing prices higher: Just this week, grocer Albertsons said higher labor costs and shipping costs would lead to higher prices in its grocery stores.
For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody’s Analytics.
As for P&G, it blamed soaring costs for raw materials, a growing pile-up of cargo ships at US ports and other supply-chain snarls. The Cincinnati-based conglomerate said its costs are rising faster than the $1.9 billion it had forecasted in July.
Now, P&G expects to shell out $2.1 billion more for its fiscal year ending June 2022 on transportation and raw materials, including pulp for its paper products.
“We do not anticipate any easing of costs,” P&G chief financial officer Andre Schulten told The Wall Street Journal. “We continue to see increases week after week, though at a slower pace.”
The inflation rate at 5.4 percent is at a 30-year high as nearly every industry struggles to get goods to the US from overseas and to make products amidst one of the toughest labor markets ever.
P&G’s price increases will help the company absorb its higher transportation and other costs. Schulten said the company is spending more across the board as it scrambles to ensure products are in stock aid increasingly spotty shelves at retail stores.
Schulten told the Journal that P&G is hiring backup suppliers and changing shipping routes to avoid bottlenecks. It’s also limiting retailers’ supplies of its goods to prevent stores from stockpiling, the company said on an earnings calls.
The top performing segment in its most recent quarter was healthcare goods products, which grew by 7 percent and includes such products as Pepto Bismol, Vicks and ZzzQuil.
Sales in each of its product categories rose in the quarter, including demand for toilet paper and cleaning products even as more people return to their places of work.
Revenues rose by 5 percent to $20.3 billion, exceeding analysts estimates.
Procter & Gamble’s shares were down 1.4 percent at $140.44 in early Tuesday trading.