# Investors warn big consumer firms over price hikes as competitors gain Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-20 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Investors Warn Big Consumer Firms Over Price Hikes as Meta Description: Consumer goods companies like P&G, Unilever and Nestle should ease price increases to avoid market share loss as supply chain costs decline. URL: https://financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gainhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-20t071305z1lynxmpej3j085rtroptp4consumer-goods-pricing-1736814116358-compressed.jpg) # Investors warn big consumer firms over price hikes as competitors gain By Richa Naidu and Jessica DiNapoli LONDON/NEW YORK (Reuters) – Consumer goods companies like P&G, Unilever and Nestle should start easing price increases as supply chain costs decline, investors told Reuters, worried that further hikes could hit market share and margin growth. The makers of everything from soap and ice cream to condoms and cleaning products have raised prices relentlessly, saying they needed to keep up with soaring costs. The Ukraine war made energy and other commodities even more expensive than they were during the pandemic, prompting a [global cost-of-living crisis](https://www.financedigest.com/global-economic-crisis-strangling-progress-for-poor-warns-u-n-development-chief.html "Global economic crisis strangling progress for poor, warns U.N. development chief"). But raising prices has in some cases come at the cost of [big packaged goods companies ceding market share to cheaper brands](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") and retailers’ private label products, and sales volumes declining. It has also soured relationships with supermarkets, [leading to products](https://www.financedigest.com/feminine-hygiene-product-market-2021-global-leading-companies-analysis-revenue-trends-and-forecasts-2024.html "Feminine Hygiene Product Market 2021 Global Leading Companies Analysis, Revenue, Trends and Forecasts 2024") being taken off shelves. Euro-zone [retail sales](https://www.financedigest.com/uk-retail-sales-rise-by-0-8-in-october-ons.html "UK retail sales rise by 0.8% in October: ONS") have been weak all year, underlining tepid consumer demand. Similarly, U.S. retail [sales fell more than expected in March as consumers](https://www.financedigest.com/germany-to-lower-sales-tax-on-gas-to-7-in-bid-to-relieve-consumers.html "Germany to lower sales tax on gas to 7% in bid to relieve consumers") cut back on purchases of big-ticket items, suggesting that the economy was losing steam at the end of the first quarter. P&G [reports quarterly](https://www.financedigest.com/aon-reports-first-quarter-2018-results.html "Aon Reports First Quarter 2018 Results") earnings on Friday, while Nestle, Durex-maker Reckitt and Unilever will do so next week. What have ( [price hikes](https://www.financedigest.com/sony-hikes-ps5-price-on-economic-pressures-rising-rates.html "Sony hikes PS5 price on economic pressures, rising rates")) done to volumes and thus to margins? What has that done to their [market share](https://www.financedigest.com/top-5-players-to-account-for-45-of-global-consumer-appliance-coatings-market-share-through-2031.html "Top 5 Players to Account for 45% of Global Consumer Appliance Coatings Market Share Through 2031") as competitors may be pricing lower and gaining share?” Tineke Frikkee, a fund manager at Unilever and Reckitt investor Waverton Asset Management, said. [“Price rises](https://www.financedigest.com/balancing-britains-energy-security-options-as-prices-rise.html "Balancing Britain’s energy security options as prices rise") should gradually decelerate as input costs do the same,” Frikkee said, adding that companies should instead be investing in product innovation. Gas prices have fallen from their peak last June, and companies, including Unilever admitted in February that the industry was past “peak inflation, but not [yet past peak pricing.”](https://www.financedigest.com/g7-finance-chiefs-agree-on-russian-oil-price-cap-but-level-not-yet-set.html "G7 finance chiefs agree on Russian oil price cap but level not yet set") Andrew Choi, a portfolio [manager at San Francisco-based Parnassus Investments](https://www.financedigest.com/mg-appoints-former-head-of-axa-investment-managers-andrea-rossi-as-new-ceo.html "M&G appoints former head of AXA Investment Managers Andrea Rossi as new CEO") said he expects P&G will push for further price hikes on its strongest brands, like Tide laundry detergent, but hold back in more commoditized categories like toilet paper and paper towels. “Staples companies are getting [pressure to ease](https://www.financedigest.com/analysis-china-central-bank-under-pressure-to-ease-is-hemmed-in-by-inflation-fed-jitters.html "Analysis-China central bank, under pressure to ease, is hemmed-in by inflation, Fed jitters") up on price increases because it hurts foot traffic for retailers, and some retailers have a lot of leverage,” Choi said. A P&G executive said at an investor conference in February that each new [pricing decision becomes more difficult as inflation](https://www.financedigest.com/young-greeks-priced-out-as-inflation-rents-soar.html "Young Greeks priced out as inflation, rents soar") persists. I still expect pricing to be the strong driver to the [top line growth,”](https://www.financedigest.com/automotive-exterior-trim-parts-market-size-industry-report-analysis-growth-future-trends-top-manufacturers-and-technology-toyota-boshoku-corporation-plastic-omnium-cie-automotive.html "Automotive Exterior Trim Parts Market Size, Industry Report Analysis, Growth, Future Trends, Top Manufacturers And Technology| TOYOTA BOSHOKU CORPORATION, Plastic Omnium, CIE Automotive") said Gretchen Novak, senior portfolio manager at Charles Schwab. She noted they would be [coming up “against increasing prices from a year](https://www.financedigest.com/mild-sourness-products-is-expected-to-fuel-growth-of-sour-sugar-market-in-coming-years.html "Mild Sourness Products Is Expected To Fuel Growth Of Sour Sugar Market In Coming Years") ago so I think it will moderate from that point. It will be a delicate balance, with consumer disposable income stretched in many [key markets](https://www.financedigest.com/date-palm-market-detailed-survey-on-key-trends-leading-players-business-opportunities-2026.html "Date Palm Market – Detailed Survey On Key Trends, Leading Players & Business Opportunities 2026") for these firms,” Jack Martin, a fund manager at Unilever investor Oberon Investments, said. Investors will be focused on forward [guidance on pricing particularly during these earnings.”](https://www.financedigest.com/takeover-target-thg-misses-downgraded-2022-earnings-guidance.html "Takeover-target THG misses downgraded 2022 earnings guidance") As with 2022, it is likely to be a [challenging year](https://www.financedigest.com/yorkshire-bank-reveals-five-key-challenges-smes-face-year-ahead.html "Yorkshire Bank reveals five key challenges SMEs face in the year ahead") for much of the sector. [(Reporting by Richa Naidu in London](https://www.financedigest.com/london-reclaims-place-as-preeminent-global-financial-centre-for-the-first-time-since-2013-according-to-global-regulatory-outlook-report-from-duff-phelps.html "London reclaims place as preeminent global financial centre for the first time since 2013, according to Global Regulatory Outlook report from Duff & Phelps"), Jessica DiNapoli in New York and Ananya Mariam Rajesh in Bengaluru. Editing by Matt Scuffham) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---