Across industries, consumers are facing escalating prices for everyday commodities due to a myriad of reasons: inflation, macroeconomic events hindering supply chains, workforce shortages, and the list goes on. And while, unanimously, this trend seems to be growing amongst most manufacturers and retailers, the challenges influencing their price markups are unique and individual.
Last month, we saw a nearly 50% increase in documentation within the AlphaSense platform mentioning “price increase” with documentation spanning from broker research to company documents. Below, we’ve pulled key insights from leaders of the top industries discussing this subject in the AlphaSense platform to share the reasoning behind their markups. Specifically, we chose to focus on: chemicals, machinery, beverages, food products, hotels, restaurants, & leisure, commercial services & supplies, and insurance.
Company Sentiment Across Key Subsectors
There were 70 industries total that came up across a search for “price increases” in the AlphaSense platform. Among those 70, there were a handful of industries most concerned with this topic.
Industrials
Industrial companies seem to experience the brunt of supply chain issues directly related to macroeconomic events (COVID-19, Russia-Ukraine war, etc.). In the AlphaSense platform, the most common citings for price markups focused on the increasing cost of raw materials and freight transportation for materials and finished products. To compensate for potentially lost profit margins, most executives have resorted to increasing consumer prices until inflation has lessened–some even reported already seeing inflated prices drop associated with production.
“However, at present we are facing an extremely severe external environment, with problems such as the COVID-19 pandemic, shortages and soaring price of raw materials including semiconductors, and supply chain disruptions. As a result, although demand for coatings themselves has been firm, we are temporarily facing a difficult situation in terms of profits due to the significant impact of soaring raw material costs, despite repeated management efforts such as price increases and cost reductions.”
– KanSai Paint Co Ltd 10Q
“However, the adjusted return on sales decreased by 1.1 percentage points to 1.5%, mainly driven by lower production utilization and higher material and energy prices. We’re seeing very good price increases, we see very good mix effects by prioritizing the high-priced markets, and we still don’t see the vehicle margins where they should be.”
– Traton SE