Kraft Heinz halts price hikes as consumers struggle from effects of high inflation

Kraft Heinz will stop hiking up the prices of its products as consumers are being increasingly sensitive to buying due to the high inflation. Households are already stretching their budgets to buy their food and needs, and the food company does not want to amplify their burden by raising prices further.

As per Reuters, Kraft Heinz also predicted that its profit this year will be below the estimates of Wall Street analysts. It said that its revenues are being pressed by more promotions and higher prices of commodities such as oils, soybean, packaging materials, and dairy products.

It was noted that Kraft Heinz’s move is similar to what beverage and snack giant, PepsiCo Inc., did last week. It announced that it will no longer impose more price increases even if it expects some consumer pushbacks in the latter half of this year.

"Consumers are looking for convenient, filling, and nutritious meals, while at the same time paying more attention to the price tag," Miguel Patricio, Kraft's chief executive officer, said in a statement. He shared that they will suspend new price hikes in most of Asia, North America, Latin America, and Europe.

Retailers have also been voicing their objection to price hikes from food companies and in fact, Tesco was in conflict with Kraft last year due to pricing issues. Despite this, some major consumer brands such as Unilever, Coca-Cola, and Procter & Gamble remained firm and said they will continue raising prices.

"With the vast majority of 2023 price increases already implemented in stores, pricing will be less of a tailwind throughout the year," Brittany Quatrochi, an analyst at Edward Jones, said. "This means driving increases in the number of products sold through innovation and adding value to consumers will be increasingly important to sales growth."

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