THE ERNST & YOUNG CONSUMER TRENDS REPORT IS HOT OFF THE PRESS

This is what they had to say about Price Increases and Inflationary Pressures:

Price Increases Spotty Despite Inflationary Pressures

“Pressure to increase prices is growing among some manufacturers as higher costs for energy, resins and other commodities—such as sugar—percolates through the economy.

“Companies that manufacture commodity products are less likely to be able to push through price increases because of the competition from private label,” says Jay McIntosh, Americas Director of Consumer Products for Ernst & Young LLP. “Consumers have the final say at the cash register and many are turning to private label to help them lower expenses for food, clothing and household supplies.”

Year-over-year inflation was minimal for the household furnishings segment (up 0.6%). The food and beverage (F&B) segment was more inflationary (up 2.7%), but deflation persisted in apparel (down 1.8%), despite the success of some high-fashion goods.

According to the report, anti-deflation strategies among manufacturers include: more organic and healthful products from F&B companies, more upscale and/or energy efficient options in the household furnishings segment and more knowledgeable sales forces and trendy offerings from the apparel segment.”

The Ernst & Young Quarterly Market Basket, which is based on components of the Consumer Price Index, compares prices in a five-year period, cutting out inherently inflationary items such as shelter, transportation, and medical care.

Jay McIntosh is Americas Director of Consumer Products for Ernst & Young LLP. He is responsible for the group’s strategy, quality initiatives, thought leadership and for developing and overseeing relationships with many of the largest and best-known retail and consumer product companies in the Americas.

For more information or to schedule an interview with Jay, please contact Wendy Hirschhorn at 212- 826-8790 - wendyhi@nyc.rr.com. McIntosh is available to discuss: The apparel, food and beverage, household furnishings segments and the on-going impact of private label.