From soap to SUVs, all consumer goods are expected to become more expensive in 2022

If your household budget was stretched beyond your control last year, and you’re hoping for some respite in 2022, the New Year has surely arrived with some bad news. After faltering under inflationary pressure for nearly a year and a half, consumers across the country are going to be taken for another ride this year.

If early trends are something to watch, an overall price hike is taking place that makes all consumer goods more expensive by at least 3-5%.

Take the category of daily essentials, for example. Packaged staples like cookies, cakes, bread, and eggs have become 8-15% more expensive over the past three weeks. Fast-growing consumer goods (FMCG) companies like Britannia, ITC, Parle Products and Hindustan Unilever (HUL) attributed it to the steadily rising prices of agricultural products, the rising cost of logistics and building materials. packaging.

“In a situation like this (high raw material costs), there is no substitute for an increase in prices. So we went ahead and implemented the pricing, ”Varun Berry, managing director of Britannia Industries told investors on a recent call. The company plans to increase prices by 6 percent.

Following the traditional tact of repeatedly passing additional costs on to consumers, Britannia and others are reducing grammage (or package size) in addition to redesigning MRP. “One-third of our prices are due to the MRP changes and two-thirds to the weight reduction,” Berry told investors.

Leading cookie maker Parle Products, which hiked prices by up to 10% last March, is set to increase MRP again by 5-10% for packaging costing Rs 20 and more. And this will reduce the size of packages below Rs 20 SKU, or storage units.

The country’s largest tobacco-free consumer goods company and leading manufacturer of HUL soaps and detergents affects calibrated price increase for its popular soap and detergent brands such as Lux, Dove, Lifebuoy, Rin and Surf Excel . Industry estimates suggest the Mumbai-based company is raising prices for Dove products by 12%, for Lux by 10%, while for the Surf Excel bar, consumers are now expected to spend 20% more.

Roll to become more expensive, once again!

Following in the footsteps of its faster counterparts (FMCG), automakers across the country are poised for another round of price hikes in January. While car price revisions in a new year are not uncommon, this year’s price revision is unique. Unlike in other years, Maruti Suzuki – the country’s largest automaker with more than 40% of the passenger car market share – announced a new round of price hikes in January, even though it raised its prices. at least three times in the past 12 months.

Others like Kia Motors, Mahindra & Mahindra, Honda, Tata Motors, Volkswagen and Toyota, except luxury car makers like Mercedes Benz, Audi and Volvo, are expected to increase the prices of their models from 1 to 3, 5%. Which basically means that car enthusiasts should shell out at least Rs 8,000 to Rs 60,000 more for entry and mid-range passenger vehicles.

There is no respite for the cost-conscious riders, who also prefer two-wheelers. From Eicher Motors to Hero MotoCorp, a group of major two-wheeler manufacturers are pushing forward with price hikes in January. The biggest player Hero MotoCorp has already announced an increase of Rs 2,000 in its entry-level models. While Eicher Motors, the maker of Royal Enfield bicycles, is raising the prices of its popular models from Rs 3,000 to Rs 5,000.

Home appliances and electronics to pinch more

Since the pandemic hit the coasts in early 2020, supply side disruptions, shortages of key components and increasing ocean freight have kept consumer electronics and durable goods on fire. Even after two years, however, buyers are lost as manufacturers continue to raise prices for essentials like refrigerators, washing machines, microwaves and televisions.

According to the Association of Consumer Electronics and Appliance Manufacturers (CEAMA), a 5-7% price hike across the portfolio is imminent.

“The industry had postponed the price increase due to the holiday season. However, currently manufacturers have no choice but to pass the price increase on to customers. We expect that. the industry increases prices from January to March in the range of 5 to 7%, ”said Eric Braganza, president of CEAMA.

Popular brands like LG, Panasonic, Johnson Controls-Hitachi and Super Plastronics, among others, have already initiated the price increases. They are moving towards price increases, despite price increases of 5-10% affected by most brands over the past year.

“We’ve done our best to absorb the same through cost innovations, but prices need to rise for the sustainability of the business,” said Deepak Bansal, vice president, Home Appliances and Air Conditioners at LG. Electronics India.

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