Shopping bills increase as consumer goods companies hike prices

Consumer goods companies hike prices to protect their profit margins as raw materials become more and more expensive.

Monthly household shopping bills have risen over the past 2-3 months, with price hikes in the range of 2 to 17% on foods and personal care products of fast moving consumer goods (FMCG) companies, Businessline reported.

FMCG companies raise prices (Mint)

Prices have been raised in the range of 2-9% on soaps and body washes, 8-11% on hair oils and 3-17% on select food items by companies, according to trade data and analysts, Businessline wrote.

The price hike comes after close to a year of declining price trends with moderating commodity prices, according to the article.

After raising prices in 2022 and early 2023 in order to maintain profit margins due to high input costs, FMCG companies held off on price hikes for the remainder of 2023, but prices have been rising again, the article read.

While there has been a decline in crude and palm oil prices, prices of other categories of commodities such as milk, sugar, coffee, copra and barley have been on a rising trend, according to the article.

FMCG giant Marico said in its earnings call that it had already hiked prices on select hair oil packs by 6% in April and could take another round of price hikes in case of further increase in the price of copra, the article read.

Snacks maker Bikaji plans to increase prices by 2-4% in the financial year 2024-25 and has already made a start in April, while Tata Consumer Products said it has started to take price increases to put it on par with competitors, according to Businessline.

Market leader Hindustan Unilever had no price increases in the financial year 2023-24 and said it would not react to short-term variation and volatility in commodities. Pricing action would be taken only in case of “deterministic change in direction”. Dabur India and Emami also indicated low single digit price hikes in the current year, the report read.

The following is a list of companies and the price hikes of their products as per the Businessline report

• Godrej Consumer Products increased prices on select stock keeping units of soaps by 4-5%, Hindustan Unilever has raised prices of Dove by 2%, while Wipro has increased the price of Santoor by 3%, according to Kotak Institutional Equities and trade data.
• The price of Palmolive Body Wash, sold by Colgate, has increased in the high single digits, while that of Pears body wash has gone up by a more modest 4%.
• Detergent brands from the stables of HUL, Procter & Gamble Hygiene and Health Care and Jyothy Labs saw price increases of 1-10% on select packs.
• HUL has increased shampoo prices across its portfolio in a range of low to mid-single digit and on skin care products by up to 4%.
• Coffee has been inflationary forcing Nestle to increase prices by 8-13%. Maggi oats noodles price has increased by 17% and ITC’s Ashirvaad whole wheat prices have gone up in low single digits.