The trend: Price hikes, shrinkflation, and other moves are helping a number of consumer packaged goods (CPG) brands deliver solid financial results despite a slowdown in sales volume.
Despite rising prices, a sizable share of consumers have yet to make changes in their purchasing behaviors, said Andre Schulten, P&G’s chief financial officer, during the company’s earnings call. “We are very encouraged by how many of our consumers continue to look for the upper end of our portfolio.”
Many consumers are trading down: CPG brands’ mediocre sales volume results reflect many people’s uneasiness about the economic climate. For example, 79% of consumers 55 to 74 years old are extremely concerned about inflation, per a survey by Kroger-owned 84.51°.
The big takeaway: While price hikes and shrinkflation have helped CPG brands paper over declining sales, there are limits to how long those tactics will last before they push too many consumers to trade down to other brands.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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