Companies can't ride out inflation by raising prices

Companies that think they can simply ride out inflation by putting up prices are in for a wake-up call, says Matthew Lynn.

A Greggs shop
Tighter belts are needed
(Image credit: © Luke MacGregor/Bloomberg via Getty Images)

Consumer-goods giant Procter & Gamble says consumers are switching to premium brands. Burberry has said it expects to have to put up the price of its coats and bags as costs increase. According to a Which survey, Waitrose has been putting up prices faster than rival supermarket chains and yet sails on regardless. Meanwhile, BT is pushing up broadband prices way ahead of inflation and even the mighty Greggs, hardly anyone’s idea of an upmarket brand, has put up the price of its sausage rolls. Companies are complacently assuming they can ride out a bout of inflation with higher prices. But is that really true?

Inflation: back to the Seventies?

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.