Pampers diapers, which are made by Procter & Gamble, are on display at an associated supermarket in New York City.
Ramin Talai | Bloomberg | Getty Images
Procter & Gamble announced on Tuesday that it will increase the prices of baby care, feminine care and adult incontinence products in September to meet rising commodity costs.
The consumer giant is joining a host of other companies, like rival Kimberly-Clark and beverage giant Coca-Cola, which are raising prices to protect profit margins. Companies are betting that consumers will be willing to pay more for the branded version instead of opting for a cheaper private label. However, this outcome depends on the economic recovery from the coronavirus pandemic and the number of consumers who will have money to spare.
P&G said its price increases would vary by brand, but would be in a mid-to-high-digit range.
COO Jon Moeller said on a press call that the company is also assessing raw material costs and currency effects on other categories, which could cause prices to increase at term. For example, Kimberly-Clark has raised the prices of its Scott toilet paper due to higher commodity prices, but P&G Charmin products have not yet been affected.
P&G shares fell less than 1% in pre-market trading after the company reported its fiscal third quarter results. The company topped Wall Street’s revenue and earnings estimates, with consumers buying more cleaning products and laundry detergent.