If you’ve done any shopping lately, you already know the bad news – prices of everyday items are on the rise. But there’s some good news for those unwilling to pay higher regular prices – for some products, deals are on the rise as well.
Unilever this morning became the latest company to announce that it’s had to raise prices across its portfolio of products, and may raise them yet again in the months to come, in order to help offset higher transportation and commodity costs. Unilever’s move follows similar announcements by Nestle and Procter & Gamble this week.
But Procter & Gamble, for one, is offering something of a good news-bad news, one-two punch. The consumer goods giant also warned this week that more of its prices will be going up. But after a year and a half or so during which good deals were hard to find, the company is offering some reassurance to shoppers that your chances of getting a discount on P&G products are better than they’ve been at any time during the entire coronavirus era.
P&G said it will be raising prices on products in its grooming, skin care and oral care categories. That’s in addition to previously-announced price hikes on products in most other categories, encompassing everything from Pampers to Bounty to Tide. In fact, the only P&G category in which prices haven’t risen – yet – is personal health care, which includes products like Metamucil, Vicks and Pepto-Bismol.
“As always, we will look to close a couple of price increases with new product innovations, adding value for consumers along the way,” Chief Financial Officer Andre Schulten told investors.
The good news is that you don’t have to pay those higher prices if you shop smart. After a year in which many manufacturers cut back on coupons and promotions, P&G says the deals are back. “We are now seeing the normalization of promotion levels,” Schulten said. “Pre-COVID period promotion, our volumes were running at about 33%” of products sold on deal. “Currently, we’re back up about 30%,” Schulten said. “So that’s certainly offsetting some of the pricing.”
At the lowest point, P&G said about 17% of its products were being sold on promotion last year, as stores and manufacturers struggled just to keep shelves stocked. As supplies were replenished and consumers’ shopping habits normalized, the coupons and deals slowly began to return, to the point that they’re now just about where they were pre-pandemic.
That’s even though keeping shelves stocked is increasingly becoming a problem again. More retailers and shoppers are reporting out-of-stocks as manufacturers navigate supply chain challenges that are impacting their ability to make their products and get them to stores.
“On any given day, something is out of stock in the store,” Albertsons CEO Vivek Sankaran told investors this week. “If you come in, you may not get exactly what you want when you want it, but you might get an alternative. And if you come in another day, you’ll probably find it.”
In P&G’s case, the company’s sheer size and influence is enabling it to avoid out-of-stocks for the most part. The company says it’s been largely successful using backup suppliers, changing shipping routes and reformulating products as needed to keep the supply of products flowing to store shelves.
And fully-stocked shelves are enabling P&G to keep the supply of coupons and promotions flowing as well – especially as less deal-sensitive shoppers essentially subsidize lower prices for the more deal-conscious. “We want to be in a position where you have product available at different price points to appeal to consumers for whom price is a bigger part of their personal value equation,” Chief Operating Officer and Chief Financial Officer Jon Moeller said. As P&G observed earlier this year, that tiered pricing is made possible in part by the fact that plenty of shoppers have continued to buy its products even at full price. And with the newest price hikes, “we have not seen any material reaction from consumers” in terms of changing shopping behaviors, Schulten said.
Albertsons, too, said it’s been able to pass along some higher prices to shoppers who don’t seem to mind paying more. But “the company has always been known for its deals,” Chief Financial Officer Sharon McCollam acknowledged. “We have data that would tell you that people come to us for our deals.” So even as prices rise, Albertsons says it’s offering plenty of promotions, too – it’s just making them more targeted and personalized.
“We’re a lot smarter with our promotions. We know which ones to do to drive traffic, which ones to do to drive margins,” Sankaran said. “We also adjust everyday pricing… there are some markets in our franchise where we’re adjusting it on an everyday basis. That’s the combination that we continue to play, and we’re getting better and better at it.”
So the next time you go grocery shopping and get sticker shock from the prices on the shelves, be sure to keep your eyes open for coupons and discounts. The retailers and manufacturers assure us that the deals are out there – it’s just a matter of finding them at the right time in the right place, so you don’t get stuck paying full price.
Image source: jeepersmedia 
