American shoppers are about to feel the pinch again as some household staples and famous brand names are set to become pricier within days.
It’s down to an expected $1 billion annual hit on a single company by President Donald Trump’s tariffs, The Washington Post reports.
Procter & Gamble, which manufactures a range of products including Charmin toilet paper, Tide detergent, Dawn dish soap, and Crest toothpaste, has announced that it will increase prices on approximately one quarter of its products, from August.
The Cincinnati-based consumer products giant is struggling to maintain growth amid economic uncertainty and trade wars initiated this year by the Trump administration. P&G announced in June that it would update its plans to cut 7,000 jobs as part of a restructuring effort following the release of its financial results.
On average, the price increases are expected to be approximately 2.5 percent, although the company has not yet specified which products or product categories will be affected.
During a media briefing call on Tuesday, Chief Financial Officer Andre Schulten described the increase as “moderate,” “adequate,” and consistent with “the typical inflation consumers would experience.”
The price hikes come as the president celebrates his tariff deadline day, with trade deals or outlines agreed with the United Kingdom, Vietnam, Indonesia, the Philippines, Japan, the European Union, South Korea, and Pakistan.
While the agreements vary, the tariffs imposed on imports from those countries are paid for by the importing U.S. company.
During the period of uncertainty over Trump’s tariffs that began in early April, most companies have maintained steady prices, and many have stocked up on imported products.
There was only so long that would last, and now the increased costs of goods or agricultural products will be passed on to American shoppers, as demonstrated by P&G’s move.
The list of household name brands manufactured by the company is long:
- Hair Care: Head & Shoulders, Herbal Essences, Aussie, Pantene.
- Skin & Personal Care: Olay, Old Spice, Safeguard, Secret, SK-II, Native.
- Grooming: Gillette, Venus, Braun.
- Oral Care: Crest, Oral-B, Scope, Fixodent.
- Personal Health: Metamucil, Neurobion, Pepto-Bismol, Vicks, ZzzQuil.
- Laundry: Tide, Ariel, Downy, Gain.
- Home Care: Febreze, Bounty, Mr. Clean, Swiffer, Cascade, Dawn, Fairy.
- Baby Care: Pampers, Luvs.
- Feminine Care: Always, Always Discreet, Tampax.
- Family Care: Charmin, Puffs.
This could be a harbinger of further price hikes, including on groceries, household staples, apparel, and electronics, as a knock-on effect of the trade deals.
Consumer sentiment is already at its lowest level in many years. Spending data indicate that Americans are seeking bargains, but economists warn that such price hikes will exacerbate the strain on consumers already dealing with stubborn inflation, high interest rates, and rising personal debt and energy costs.
Some retailers have already begun to raise prices, notably Walmart, which has increased the prices on many items, mostly manufactured in China, including toys, baby gear such as strollers, car seats, and bassinets, as well as kitchenware.
The next round of price hikes is likely to be visible in grocery aisles, with 75 percent of imported foods expected to be affected. A 50 percent tariff on steel and aluminum will also increase the costs of packaging, from coffee tins to beer cans.
Some brands and retailers may be able to hold off on raising prices by absorbing costs, switching suppliers, or negotiating the prices they pay for imports before tariffs are applied; however, this is a delicate process, though it could pay off if competitors fail to keep prices reasonable for shoppers.
Spending habits are also changing, with more consumers opting for store-branded goods or prioritizing value.
P&G has seen its consumers switching out more expensive products within its brand range for more affordable options — for example, buying Luvs over Pampers diapers.
There has also been a slowdown in spending on skin and personal care, grooming, and hair care.
“The lower-income consumer and the higher-income consumer are reacting to the current volatility they are seeing and they are observing, and we see consumption trends consistently decelerating,” Schulten said. “Consumers are a bit more careful in terms of consumption.”
The company, which reported a 2 percent increase in net sales to $20.9 billion in its most recent fiscal quarter, announced plans to restructure due to the impact of tariffs.
This includes discontinuing some brands and products, adjusting its supply chain, and reducing its workforce by about 15 percent over the next two years.
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