After the pandemic began, prices for everything started going up—and quickly.
Covid-19 may have killed workers, depressed economic growth, and thrown the entire planet into an existential crisis, but vaccines for the virus may as well have been a shot in the arm for global spending. People wanted to start buying stuff again, and they had the money to do so—but jammed-up supply chains and shortages of raw materials meant that there was a mad scramble for whatever could be cobbled together and shipped out the door. Hence: US inflation, which peaked at a 8.9% year-over-year leap in June 2022.
And because prices were going up anyway, corporate America took the opportunity to grab a little extra for themselves. US president Joe Biden called it “price gouging.” Others deemed it “greedflation.” But some executives like WD-40 chief financial officer Sara Hyzer have another name for it: “tactical price increases,” as she politely referred to it on a Tuesday (Jan. 10) earnings call with investors.
But as inflation continues to slow, it’s getting harder for companies to justify their extra pieces of the pie. In Europe, PepsiCo and grocery giant Carrefour have been locking horns in (government-mandated) negotiations over how much more it’s possible to charge for bottle of soda; the latter placed placards on its Pepsi-less store shelves reading “we will no longer sell this brand because of unacceptable price increases.”
Though WD-40 chief executive Steve Brass insisted that “it’s hardly a situation where we’re profiteering,” he did acknowledge that the lubricant and degreaser specialist is having a lot of conversations with its retailers about how much its cans cost. It’s not cutting prices (deflation), but it’s not raising them as quickly either (disinflation).
Putting it succinctly, Hyzer let investors know: “Currently, we are not planning any additional tactical price increases in any of our larger markets in the near term.”
When US consumer price index data drops Thursday (Jan. 11), we’ll find out how many other companies are joining them.