Corporations Raise Prices as Consumers Spend ‘With a Vengeance’

Corporations Raise Prices as Consumers Spend ‘With a Vengeance’

“It’s a really, really good constructive pricing environment that we’ve seen right now, probably the best in recent memory,” said Richard J. Kramer, Goodyear’s chief executive officer, on a Feb. 11 conference call.

The company looks to its competitors when it comes to raising prices—but they, too, charge more.

“There are nine competitors that we tend to follow, and seven out of nine announced price increases in the first quarter, and one of those that didn’t raise prices right away late last year,” Darren Wells chief financial officer said on the call . Goodyear saw margins widening last year, in part due to price increases.

The family of restaurants that owns Outback Steakhouse Bloomin’ Brands plans to raise prices across its brands by about 5 percent to meet rising labor and food costs — and by coupling that with efficiency gains, it’s managing to increase its prices to increase profits.

“It became clear that the previously discussed 3 percent pricing was not enough to offset the increased inflationary pressures our industry is facing,” said Christopher Meyer, Chief Financial Officer at Bloomin’ Brands, of the most recent quarter. “Given that we haven’t made a material increase in menu price since 2019, we’re confident that 5 percent is reasonable.”

Mr. Meyer pointed out that while operating inflation was 4.9 percent and labor inflation was 8.9 percent in the last quarter of 2021, the company has managed to grow profits by increasing efficiency by simplifying its menu and reducing food waste.

For 2022, he said, the company expects beef inflation “in the mid to high teens” and wages inflation “in the high single digits.”