Consumer Product Prices Expected to Rise Further Amid Ongoing Inflation
Essential consumer product prices to rise further amid inflation: Report
Image: Asianet Newsable
A report by Systematix Research indicates that prices for essential consumer products will likely increase further due to inflationary pressures on raw materials. Companies have already raised prices by 3-7% recently, and further hikes and reductions in product sizes are anticipated, particularly in food and beverage and personal care sectors.
- 01Consumer product prices have already increased by 3-7% in the past one to two months due to rising raw material costs, which have surged by 8-10%.
- 02Further price hikes and grammage cuts are expected in food and beverage and home care products as companies seek to offset rising input costs.
- 03Pricing growth is projected to contribute significantly to revenue growth, with a 50:50 split between pricing and volume in FY27.
- 04Palm oil prices have increased by 11%, and Brent crude oil prices surged by 32%, contributing to the overall cost inflation.
- 05Packaging costs have risen sharply, with High-Density Polyethylene (HDPE) prices increasing by 56%, impacting production costs in various sectors.
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According to a report by Systematix Research, essential consumer product prices are set to rise further as companies face ongoing inflationary pressures on raw materials. Over the past one to two months, companies have already increased prices by 3-7% due to an 8-10% rise in raw material costs. The report highlights that further price hikes and reductions in product sizes, known as grammage cuts, are likely in the food and beverage (F&B) and home and personal care (HPC) sectors. This trend is expected to significantly impact revenue growth, with pricing and volume contributions projected to be around 50:50 in the first half of FY27. However, rising retail inflation may affect consumption volumes. The report also notes sharp increases in the costs of palm oil and crude oil, with palm oil prices rising 11% and Brent crude oil prices surging 32%. Additionally, packaging costs have escalated, particularly for High-Density Polyethylene (HDPE), which has seen a 56% price increase. Companies are likely to adopt a mix of price hikes, grammage reduction, and operational efficiencies to maintain profitability amidst these challenges.
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The anticipated price increases and potential reductions in product sizes will affect consumers' purchasing power and choices in essential goods.
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