Commodity retailers are looking at their pricing strategy as well. According to this report by the AP, commodity retailers raised prices last year to keep up with the costs of production and distribution materials, but are now having to cut prices again to maintain customer loyalty as an increasing number of consumers are in a financial crisis.
BusinessWeek and the Associated Press recently highlighted the example of Clorox:
"Price hikes on some consumer staples may be hitting their limit.
"Clorox's chief executive said Friday that the company had rescinded most of its planned price increases and that further cuts were possible.
"I think you'll see the industry backing off," CEO Don Knauss said in an interview with The Associated Press. "I think there's very little appetite for increases."
"As prices for oil, gas and plastics rose to unprecedented heights last year, most major consumer products companies raised prices for a range of staples, including pet food, toothpaste and toilet paper. Clorox, maker of its namesake bleach, sells a range of products from Hidden Valley Ranch salad dressing to Brita water filters and Fresh Step kitty litter.
"Now that commodity prices are easing up and consumers face a financial crisis, some companies are cutting prices to attract shoppers."
Read the full article: "CEO: Clorox rolls back prices, more cuts possible"
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