Cost inflation rose during the COVID-19 pandemic and was exacerbated by Russia’s invasion of Ukraine, which sent energy prices to record highs last year. Energy costs have since dropped, however, while global prices for some commodities are rising more slowly.
Carr 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 per cent while sales volumes declined 4.5 per cent. The maker of Activia yogurt and Evian water raised first-quarter prices by 10.3 per cent and volume/mix rose 0.2 per cent.
Several firms have since made near-record price hikes: beverage giant Coca-Cola Co said average selling prices rose by 11 per cent in the first quarter, while rival PepsiCo Inc said its prices gained 16 per cent. “So to the degree that the rate of inflation decreases – and it will be a decrease in the rate of inflation, not deflation by any stretch of imagination – that’s going to happen very slowly over the course of 2023.”
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