Shoppers face price hike amidst global supply chain disruption

The financial results of Procter & Gamble (P&G), Danone, and Ericsson this week have further highlighted increasing costs and supply chain issues, which will likely mean higher prices for consumers.

Multinational consumer goods corporation P&G, which owns a wide range of well-known beauty, grooming, and home care brands including Head & Shoulders and Ariel, expects to lose $2.3 billion in expenses this year. The company blamed increased raw material costs alongside higher energy prices.

Danone said that there would be further inflationary pressures in the coming year and that operating margins would be safeguarded by price hikes and productivity increases.

“Like just about everyone across the sector and beyond, we see inflationary pressures across the board,” said Juergen Esser, chief financial officer, Danone. “What started as increased inflation on material costs evolved into widespread constraints impacting our supply chain in many parts of the world.

“That said, we are putting even greater focus on productivity and pricing actions to mitigate the impact on our performance, thus re-iterating our FY 2021 guidance.”

On Monday, a report from EY-Parthenon revealed that UK listed companies in consumer-facing sectors, including retail and grocery producers, accounted for 33 per cent of all profit warnings in the third quarter of the year as rising energy prices, supply bottlenecks, and labour shortages spread across the economy.

Earlier this month, statistics released by Nielsen found that Tesco, Sainsbury’s, Asda, and Morrisons have lost £2 billion this year due to ongoing supply chain issues.

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