Companies Take Different Strategies to Navigate High Inflation
Kanebridge News
Share Button

Companies Take Different Strategies to Navigate High Inflation

P&G is ramping up advertising for premium brands; Verizon is raising prices for wireless services
Procter & Gamble Co. is ramping up advertising on premium brands. Verizon Communications Inc. is raising prices on wireless plans, while Whirlpool Corp. has slashed production of appliances.

By THOMAS GRYTA
Mon, Oct 24, 2022 8:41amGrey Clock 3 min

High levels of inflation in the U.S. and shifts in underlying demand are putting the spotlight on the strategies executives are taking to navigate a global economy where costs are rising and consumer appetite for some products has waned.

The first batch of earnings reports from companies for the September quarter show that corporate profit margins are feeling the squeeze of the macroeconomic trends. With a fifth of the S&P 500 index already reporting, data-provider Refinitiv projects quarterly earnings will decline 3.5% from a year ago, excluding the energy sector. Companies are taking different tacks to manage the pressures on their businesses.

“The average consumer [has] become increasingly price-sensitive as the year has progressed,” Hasbro Inc. Chief Executive Chris Cocks said during an earnings call Tuesday. The maker of Nerf and other toys reported third-quarter sales fell 15% because of the timing of product releases and that profits were pinched because it had to increase promotional activity amid a buildup in inventory before the holidays.

P&G, which sells household staples such as Pampers and Tide, is spending on high-profile advertising campaigns and new product features to keep cash-crunched consumers from switching to cheaper brands. In its most recent quarter, higher commodity, materials and freight costs reduced its gross profit margin by 5.5 percentage points, which was fully offset by cost cuts and price increases.

Chief Financial Officer Andre Schulten said the company has enough brands and price levels to give consumers options within its own portfolio. There was growth in mid tier brands during the quarter but also customers spending more on large-size packages to lower the per-use price.

“The strategy to provide pack sizes that stretch from below $10 for some channels and consumers to above $30 or $40 for others seems to be meeting consumers’ needs,” Mr. Schulten said.

Verizon and AT&T Inc. both raised prices on some of their cellphone plans over the summer, a strategy that yielded widely different outcomes. AT&T reported a third-quarter net gain of 708,000 postpaid phone connections—its most valuable customer category—a sign that few of the subscribers affected balked at higher monthly bills.

Verizon’s more widespread rate and fee increases drove down the same types of phone connections in its consumer segment. New business lines barely offset that decline, and the telecom company ended the September quarter with a relatively weak 8,000-phone gain.

Executives at both companies said the higher rates helped boost profits. Matt Ellis, chief financial officer at Verizon, said overall wireless-service revenue grew despite the customer defections, partly because many of its remaining customers chose to upgrade their wireless plans to more expensive packages with perks such as Disney+.

Telecom companies have also said that they benefit from providing an essential service to customers who are mostly able to keep paying, despite signs of trouble in the broader economy. Mr. Ellis said the company “won’t be shy” about raising prices for certain services if it makes sense over the coming months.

“I look at my payment data, and the payment patterns are better than they were pre-Covid,” Mr. Ellis said. “Our base has never looked as strong from a credit standpoint.”

The top U.S. cellphone carriers have avoided raising the price of their most expensive plans, which can cost as much as $90 a line, choosing to target older plans. And many consumers agree to enrol in premium monthly plans in exchange for valuable discounts on new smartphones.

AT&T has sought to regain market share over the past two years by giving new and existing customers deep equipment discounts contingent on customers sticking with the service for two or three years. The company has said its strategy is working but is still less extreme than some of its rivals’ current offers.

Others, such as Whirlpool, are feeling whiplash from a sudden drop in demand for their products at the same time they are confronting high costs for materials, energy and other expenses.

“Demand is down, and cost is up,” Whirlpool CEO Marc Bitzer said during a conference call. “You would expect costs to come down in a recessionary environment. We’re operating in unprecedented times.”

Whirlpool isn’t turning to discounting to move unsold fridges and dishwashers. Instead it slashed production by 35% to shrink inventories. The company cut its profit forecast for 2022 by about half, warning that high costs were likely to persist into next year as appliance demand remains muted.

Fastenal Co., a major distributor of industrial supplies such as nuts and bolts, has been raising prices to offset rapidly rising costs, but the recent quarter showed signs of stability in costs along with some resistance from customers.

“At this stage of the cycle, the marketplace is less receptive to further price increases,” said Fastenal finance chief Holden Lewis on an Oct. 13 conference call. “Product pricing in the marketplace is stable, and there are tenuous signs of product inflation easing.”

—Bob Tita contributed to this article.



MOST POPULAR

As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.

Knight Frank’s latest Horizon 2025 update signals renewed confidence in Australian commercial real estate, with signs of recovery accelerating across cities and sectors.

Related Stories
Lifestyle
Soneva’s Coral Program Earns UN Backing in Major Win for Marine Restoration
By Jeni O'Dowd 22/05/2025
Lifestyle
Our Retirement Travel Plan? Wing It.
By Diane Di Costanzo 21/05/2025
Lifestyle
MARCEL ZALLOUA CLAIMS PODIUM FINISH AT SYDNEY MOTORSPORT PARK IN GT WORLD CHALLENGE AUSTRALIA
By Kanebridge Staff 16/05/2025
Soneva’s Coral Program Earns UN Backing in Major Win for Marine Restoration

Soneva’s groundbreaking Coral Restoration Program in the Maldives has been endorsed by the United Nations and listed on UNESCO’s Ocean Decade platform, recognising it as a global model for reef regeneration and sustainable marine science.

By Jeni O'Dowd
Thu, May 22, 2025 2 min

In a landmark moment for marine conservation, the Soneva Foundation’s Coral Restoration Program has received official endorsement from the United Nations and been listed on the UNESCO Ocean Decade website — an international recognition of its pioneering work in large-scale reef restoration.

Based in the Maldives and operating from Soneva Fushi’s AquaTerra science centre, the program is now the region’s largest coral restoration facility. Combining advanced marine biology with local collaboration, it has redefined how the tourism sector can contribute meaningfully to ocean health.

What sets the program apart is its blend of innovation and scale. The facility includes a Coral Spawning and Rearing Lab—Maldives’ first of its kind—replicating natural reef conditions to stimulate coral reproduction. Thirty micro-fragmentation tanks further accelerate coral growth, enabling up to 150,000 coral fragments to be produced and replanted on damaged reefs each year.

Since launching in 2022, Soneva’s coral team has relocated more than 31,000 coral colonies and fragments from threatened areas, establishing a thriving coral hub in the Indian Ocean.

he initiative is managed by Soneva Conservation, a Maldivian NGO set up by the Soneva Foundation, and forms part of the group’s broader sustainability strategy.

“This milestone is a testament to the scientific rigour and community-driven ethos at the heart of our work,”  Dr Johanna Leonhardt, Soneva’s Coral Project Manager, said.  “It validates the potential of hospitality to lead ocean regeneration at scale.”

Beyond science, the program engages governments, NGOs, research institutions and the wider tourism industry—demonstrating how cross-sector partnerships can drive real environmental impact.

The UN recognition now positions the project as a beacon for similar initiatives globally, reinforcing the Maldives’ role as both a luxury destination and a marine conservation leader.

The Soneva Foundation’s wider environmental efforts include carbon mitigation projects, reforestation, and waste-to-wealth innovation. As part of the Pallion group, Soneva continues to redefine what it means to be a responsible luxury brand.

MOST POPULAR

Rachel Zegler and Gal Gadot star in an awkward live-action attempt to modernize the 1937 animated classic.

As tariffs bite, Sydney’s MAISON de SABRÉ is pushing deeper into the US, holding firm on pricing and proving that resilience in luxury means more than survival.

Related Stories
Lifestyle
Can Formula One Ever Be Sustainable?
By YUSUF KHAN 13/03/2025
Lifestyle
Dropping anchor on the cruise of a lifetime
By Mercedes Maguire 27/12/2024
Lifestyle
Why Swimwear Star Rebecca Klodinsky Walked Away From a Celebrity-Favourite Brand
By Jeni O'Dowd 11/04/2025
0
    Your Cart
    Your cart is emptyReturn to Shop