Shoppers to face fresh price hikes as stores, suppliers pass on costs
Grocery costs seen rising further in 2023 -executives, analysts
Input costs exacerbated by Ukraine war
Retailers seeking to pass on high raw material costs
Unilever, Nestle, Danone to report results this month
Cost inflation likely to be a feature - analysts
By Richa Naidu
LONDON, Feb 8 (Reuters) -Shoppers around the world will pay even more for groceries this year than they did in 2022, according to retailers, consumer goods firms and investors, unless commodity costs decline or the shift to cheaper store-brand products accelerates.
Retailers and consumer goods producers have been stuck in tough price negotiations for more than a year now, with friction beginning in 2021 over COVID-related supply chain logjams.
This has since ballooned into fights over the high cost of raw materials and energy in the wake of Russia's invasion of Ukraine, with rising prices of basic foodstuffs from bread to milk and meat exacerbating a cost-of-living crisis in Europe.
Britons paid a record 16.7% more for food in the four weeks to Jan. 22 compared to the same period last year, according to research firm Kantar. The U.S. food index, including meals eaten at home and in cafes and restaurants, increased 10.4% for the year ended in December.
Mark Schneider, CEO of the world's biggest food group Nestle, last week told a German newspaper it would have to raise prices of its food products further this year to offset higher production costs that it has yet to fully pass on to consumers.
"Investors will pay a premium for companies that exhibit pricing power in their portfolio without adversely impacting volumes and market share," Jack Martin, a fund manager at Oberon Investments, said.
Big, packaged-goods companies' margins have been squeezed by higher input costs for over a year as the price of ingredients like wheat and sunflower oil have skyrocketed since the Ukraine war began last February.
Unilever ULVR.L, which is due to report full-year results on Thursday, said in October that its underlying price growth - an indicator of pricing - rose to a record 12.5% in the third quarter. Nestle and dairy giant Danone DANO.PA are due to report results later this month.
Tineke Frikkee, a portfolio manager at Waverton Investment Management, expects Unilever to hike prices in 2023, though selectively.
"The last time we heard from Unilever, it was made clear that they prefer to sell fewer products at higher prices, to keep prices below peers and gain market share," Frikkee said.
RETAILER PUSHBACK
Consumer goods manufacturers - will continue to raise prices until they recover their profitability, said Bernstein analyst Bruno Monteyne.
"The only thing that can stop this is...consumers starting to trade down to private-label products at a more rapid pace ... (and) if commodities keep declining, then there may be no need for more price increases."
In December, the CEO of Walmart WMT.N, the world's biggest retailer, warned that some "packaged goods suppliers are still pointing us towards more inflation next year on top of the mid-double digits this year".
"Dry grocery and consumables have double-digit to mid-double-digit inflation that feels stubborn to us," Doug McMillon said, adding that suppliers were being encouraged to focus on "the longer term with us".
European retailers are also pushing back.
"With the big suppliers, we do insist on long-term contracts that do not have to be renegotiated," Belgian discount retailer Colruyt COLR.BR told Reuters.
Britain's biggest supermarket group Tesco TSCO.L and Kraft Heinz KHC.O last year could not agree on prices for some brands, resulting in several products disappearing from shelves. This month, Unilever's Hellmann's mayonnaise was discontinued in South African stores due to cost inflation.
Tesco CEO Ken Murphy said last month he was hopeful inflation would peak by mid-2023 and then start to ebb.
Barclays analyst Warren Ackerman said although food commodity prices on average were down 20% from March peaks, it will take time for this to reflect in companies' costs.
Reporting by Richa Naidu in London. Additional reporting by Jessica DiNapoli in New York and James Davey in London; Editing by Matt Scuffham and Emelia Sithole-Matarise
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
