A big US manufacturer said it’s poised to further hike prices on a slew of household goods — and signaled there’s no end in sight.
Procter & Gamble — the consumer-products giant that makes Tide laundry detergent, Crest toothpaste and Gillette razors, said Tuesday it’s raising prices on a host of beauty, oral care and grooming goods, which include Gillette razors, Oil of Olay and Oral-B toothbrushes.
That’s after warning this spring that it would be forced to hike prices on its paper-based products, which range from Pampers diapers to Bounty paper towels and Tampax tampons.
Blaming 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.