With the Consumer Price Index rising 0.9% in June, food brands are raising prices to keep up with inflation. The latest major company to follow suit is Conagra.
Conagra recently cut its fiscal 2022 outlook due to rising costs, which it will try to offset by increasing prices, reported AP News (July 13). The company, which saw net sales decrease 16.7%, to $2.74 billion, in its fourth quarter, now foresees fiscal 2022 adjusted earnings of about $2.50 per share after previously predicting earnings of as much as $2.73 per share.
Conagra expects that consumer demand for retail brands will remain high compared with historical levels during 2022, due to lasting habits built during the pandemic. However, president and CEO Sean Connolly said in a statement that fiscal 2022 costs are now seen as being materially higher than anticipated.
Though the brand is raising prices to combat that, Connolly noted that there will be a lag between the time the company is hit with the higher costs and when it realizes the benefits.
Other companies, such as General Mills, have also announced price increases for some or all of their products in recent months. At the end of June, General Mills said it was raising prices across nearly all of its grocery categories globally, The Wall Street Journal reported (June 30).
More expensive ingredients, packaging, trucking and labor will push General Mills’ overall costs about 7% higher over the next year or so, according to executives.