COGS: ‘We struggle to see how companies will combat this higher inflation without additional price increases’
“Ignoring changes in volume,” add the Bernstein analysts, “We estimate that a ~6.5% increase in pricing is needed to stay gross profit dollar neutral given a 10% increase in COGS. In light of current pricing actions and another year of elevated cost inflation, we struggle to see how companies will combat this higher inflation without additional price increases, something that will become increasingly hard to do as the window to negotiate with retailers closes.”
