The market is a forever-changing platform; it can never be constant so is the price. If the price of raw and input materials increases then the selling price of that particular product is bound to rise up. The supply chain got disrupted during the pandemic situation and international companies needed some time to sort out everything. Now the sequential waves of coronavirus are affecting the whole world. So, shipping time, method, and costs are changing drastically. This is leaving a negative effect on the price of goods and commodities. Let us see how Pepsico is dealing with these adverse circumstances.
PepsiCo has been incurring incredible high costs since the pandemic started. The Department of Labour informed that the CPI(Consumer Price Index) lifted up to 5.4% in the last month compared to the last year. Prices of food rose 0.8%. Because of the high rate of inflation, prices of food got a push and it has turned out to be the biggest gain in the last era.
CEO of PepsiCo Ramon Laguarta said that freight charge, labor cost, price of ingredients have raised too many levels up. We are facing trouble coping with it. To bear with this situation, we are planning to increase the price of products and also raise the level of productivity to the extent possible. As high productivity enables to keep the price of products low. They were expecting to increase the price from May 1 so now it is happening.
A similar kind of company, Conagra is losing share because of the same reason. Their stock has fallen 5% this year and lost a market value of $16.5 bn. They want to incorporate the same type of strategy like price hikes to handle the situation.
Though the increment of prices is not for all time. It is just to survive during the Covid 19 period. Organizations like PepsiCo, Conagra, Sam’s Club are trying to keep the price within the affordable range so that shoppers can easily avail them. But the situation is not actually in favor. Everyone is facing an economic breakdown due to constant lockdown and all. However, we are hopeful to enjoy stable pricing after the situation gets normal.
Sayma Akter Santa
Intern, Content Writing Department
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