After Marmite Comes The Bitter Taste Of New Year Price Rises

The high-profile row between Tesco and Unilever was just a harbinger of what may be a grim 2017 at the checkouts.

Read the full article on The Guardian website

NAM Implications:
  • Where at:  As night follows day, the price-increase gate has been opened, slightly…it is not a flood-gate…
  • Where headed: Pent-up costs will morph into shelf-price increases only if NAMs can build and deliver fact-based and defensible arguments on the back of brand pulling power, and a credible willingness to walk, if stone-walled by the buyer. ‘Marmite’ happened, not because Tesco refused to accept a price increase, but because Unilever were prepared to withhold supplies on some of the UK’s most iconic brands…
  • Effect on you: Whilst your currency-related costs will rise by up to 20%, market pressures will cause suppliers and retailers to have to absorb much of these extra costs, leaving the consumer to pick up 5% at most, starting in the New Year, but negotiated now…
  • Action: Time for a realistic and detailed assessment of the actual cost-increases coming through, by SKU (think also about the effect on future dealings of revealing this degree of detail now). Re-assess the relative appeal of your brand vs. available options, taking a judgement call on possible moves by your main competitors (best way forward is to check the latest annual reports of main customers and competitors in order to get a steer on their financial pain and anticipate their financial flexibility).
  • Weigh up your options – and even consider product withdrawal from retailers where your brand appeal is insufficient – and go for fair-share deals and cost-absorption on your best options…
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