NEW YORK (AFP) – Prices on household goods have been rising for months in the United States (US), souring the national mood but not significantly affecting sales – yet. Producers of everything from paper towels to soda to mattresses have described consumer behaviour as relatively resilient despite broad-based price increases.
But just how much further companies can hike prices without facing pushback remains an open question.
Chris Scharff, who works in computer security and lives in New York’s Hudson Valley, is watching the higher prices for gasoline and household items.
“It hasn’t changed my behaviour but I’ve been more mindful,” said Scharff who predicts “people will start to cut back, or they’ll go for non-premium” options if prices continue to rise.
Eric Schwartz, who works in publishing, said he will cut back at the margins, drive less frequently, or “eat a little more pasta”.
With inflation at a 40-year peak and little sign of immediate relief, the consumer-driven US economy faces question marks, despite very low unemployment and accelerating wage gains.
Americans have seen a growing wave of price hikes since last year, amid global supply chain snarls and labour shortages, but the increases picked up speed after Russia invaded Ukraine and sanctions on Moscow sent energy costs soaring.
Many observers expect the surge will force shifts in consumer behaviour in the months ahead.
“Although inflation has been around for a while, it’s only really now starting to bite in a serious way,” said an analyst at GlobalData Retail Neil Saunders.
More consumers will cut back as they conclude they “can’t keep coping with all these price increases”, he said.
