From Cola to Soap, Prices Rise... Inflation-Driven Household Pressure Increases

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the world struggles with inflationary pressures, prices of various consumer goods, from beverages to soap, are rising one after another. Leading global consumer goods companies such as Coca-Cola, McDonald's, and Unilever are reflecting the cost burdens caused by rising prices in their product prices and are even forecasting additional price increases, which is expected to rapidly increase the burden on households.

According to the Wall Street Journal (WSJ) and others on the 26th (local time), British household goods company Unilever announced in its earnings report that it raised product prices by an average of 11.2% during the second quarter of this year. Thanks to these price increases, Unilever's sales increased despite a slight decrease in product sales. Unilever, which produces Dove soap, mayonnaise, and Huggies diapers, warned that "unprecedented cost increases are occurring."

Household goods manufacturer Kimberly-Clark also raised product prices by 9% during the second quarter, and Coca-Cola's product prices increased by about 5%. McDonald's stated that, along with product price increases, consumers are choosing cheaper menus due to the impact of inflation, and they are considering adding discount products reflecting this situation. On the same day, CNBC reported that Amazon raised the price of Prime services operated in Europe by up to 43% in consideration of the inflation situation.

These consumer goods price increases are due to global inflation. Due to the impact of inflation in the U.S., which has surged for the first time in over 40 years, U.S. companies are raising product prices one after another, citing raw material cost burdens and other reasons. The day before, U.S. retailer Walmart warned that prices of essential goods such as gas, energy, and food have risen sharply, leading consumers to prioritize these in their overall consumption and purchase more food. WSJ reported, "Global corporate leaders say they will continue to pass cost burdens on to consumers."

As this situation intensifies, concerns about economic recession in major countries such as the U.S. have increased. James Quincey, CEO of Coca-Cola, said about this situation, "The typical pattern of a recession is that consumers initially stop buying expensive or regular products. They say, 'I'll replace the car or mattress later.' Then they start stockpiling cheaper products. This phenomenon has begun to appear in some countries and some product categories."

The U.S. non-profit economic research organization Conference Board announced on the same day that the U.S. Consumer Confidence Index for July was 95.7, marking a decline for three consecutive months. This index reflects consumers' evaluations of the future economic outlook, and a value below 100 means that more people have a pessimistic view of the economy.

This content was produced with the assistance of AI translation services.