Companies' cost inflation is slowing but shoppers may wait for lower prices

Cost of goods inflation will be "significantly" lower this year - Reckitt expects 5% to 9% versus 18% last year, the company's finance chief Jeff Carr said on a call on Wednesday to discussCarr said that while salary costs have increased, commodities are a "mixed bag" and freight costs have declined. First quarter price/mix, a basket of variables the company uses to help determine what prices to charge, rose 12.4% while sales volumes declined 4.5%.

"Our pricing obviously will be measured in 2023, where we did most of our heavy lifting or pricing in 2022," Carr said. Danone CFO Juergen Esser told a post-earnings call with analysts that while labour costs, liquid milk and sugar prices are up, some other costs are down, so "we expect inflation to decrease through the year".and volume/mix rose 0.2%.

It is unclear when companies may start passing on some of their lower costs to customers. On Tuesday, Associated British Foods said it does not expect many more price increases in the second half of this year, as costs including wheat, vegetable oils, freight and energy start to fall.

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