REA full-year results benefited from another 8 per cent average national price rise.
An industry’s structure can give tell-tale hints of a company’s ability to pass through cost inflation. PEXA says it processed about 85 per cent of nationwide residential property transfers last year. Chief executive Glenn King says he supports the introduction of competition as long as it is the “right form of competition”.. It says that 68 per cent of its revenues are protected by contracts that include CPI-linked escalation clauses. And just in case you were wondering, prices can’t be lowered in a period of deflation either .
“These are some of the largest pricing increases by geography and by product line that we’ve put in the market over the past five years. And I think that’s appropriate. I think it’s reflective of the inflationary environment we’re facing,” CEO Zlatko Todorcevski says.The good news for investors is that price increases across the Australian economy are being met with little resistance from customers – so far at least.
“While the demand outlook likely softens, we believe many companies will have to balance passing on higher costs while maintaining volumes. We believe the current dynamic of passing costs onto consumers cannot last forever, and companies may have to change tact before the end of this calendar year,” Wilsons Advisory told clients.
“Typically, these prices are more measured and consistent over time. Such businesses are rare. These businesses can take price steadily and regularly because the value they add to customers is so much larger than the price they charge for it.
Oh sure...and us consumers can choose the same companies so as avoid the cost increases
e.g. Coles, Wollies, Harvey Norman,