Chief Pricing Officer

There was an interesting Wall Street Journal story last week about retailers pushing back against rising food prices. With the cost of oil falling and commodities prices leveling off, retailers may now be resisting manufacturers’ price hikes:

With corn, wheat and other commodity costs coming off their summer peaks and the economy continuing its slide, grocery chains in the U.S. and abroad are balking at food makers’ efforts to raise prices further.

Some retailers are using food companies’ earnings reports as leverage to reject price increases, according to industry analysts. Others are pushing for more promotional allowances – such as buy-one-get-one-free deals – to help move higher volumes of goods.

These actions serve as a not-so-subtle reminder that companies need to be mindful of where prices are going, not just where they’ve been. Being proactive about pricing – spending time to forecast upward or downward trends – allows manufacturers to proactively adjust prices, rather than price in reaction to retailers’ requests.

Retailers are now understandably sensitive about passing along additional costs to consumers, so manufacturers need to be even smarter in how they price each product in their portfolio. Rather than across the board price increases, manufacturers need to carefully examine profitability by customer, channel and product mix.