Shoppers Should Brace for Steep Price Hikes
Shoppers who briefly enjoyed stable prices may need to prepare for another round of increases. After several months of relative calm—helped in part by holiday discounts—companies are once again raising prices on a wide range of goods, from jeans and spices to software, the Wall Street Journal reports. Economists say the latest hikes, often in the high-single-digit range, appear steeper than a typical January reset, especially for electronics, appliances, and other durable items.
Companies including Levi Strauss, Columbia Sportswear, McCormick, and many smaller firms say their costs have climbed due to tariffs, wages, health insurance, raw materials, and shipping. At least some of those higher expenses are being passed on to consumers. Online pricing data tracked by Harvard economist Alberto Cavallo and Adobe show the largest monthly jump in web prices in more than a decade, led by big-ticket categories.
Small businesses, facing thinner profit margins, are either raising prices broadly or cutting products they believe customers won’t pay more for. A recent Vistage survey found that more than half of small-business leaders plan price increases in the near term, mostly in the 4% to 10% range, even as they worry higher prices could deter buyers. Economists at JPMorgan said last week that inflation is likely to pick up again for a time this year, citing tariff-related costs being passed on to consumers and the potential effects of a weaker trade-weighted U.S. dollar, Reuters reports.
Bryan Erickson, president of Structural Systems Repair Group, a Cincinnati-based construction company, told the Journal that tariffs pushed steel prices up about 10% last year, while employee healthcare costs rose by roughly the same amount. “It’s not sustainable for us to tolerate that kind of increase without some sort of concession from our customers,” he said.
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