Price check: a look back at 2024 so far

We are officially halfway through the year so in this week’s installment of Power to the Pricing People, we’re hitting pause and reflecting on how businesses are faring so far in 2024.

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H1 price hikes 

In the first half of the year, big players won profits by making price rises work for them. While brand recognition offers businesses a power-up, with consumers showing brand loyalty and favouring trusted products even when prices rise, research indicates that pricing is the true MVP when it comes to influencing purchasing decisions. For example, FMCG giant PepsiCo hit the sweet spot in Q1, with a 5% average price rise contributing to revenue growth in the first few months of the year.

Elsewhere, Kraft Heinz reported a 6% increase in revenue year on year despite declining volume sales. However, while the business benefitted from price-led revenue growth, with prices up nearly 3% in the first three months of the year,’ Q1 results ultimately fell short of initial estimates largely due to pricing out cost-sensitive shoppers. To tackle this, the company is falling back on the promotional playbook, sweetening deals to aid recovery in volumes.

Promotional pivots

Like Kraft Heinz, McDonald’s missed sales expectations in Q1, despite seeing global net income increase by more than 7% compared to the year prior. While higher menu prices helped to deliver this uplift, they also deterred some customers who tightened their wallets in response.

The negativity surrounding the business’ pricing has led the US CEO to write an open letter explaining the price rises. To win back budget-conscious customers, media reports suggest McDonald’s is leaning into promotions and planning a $5 meal deal to tempt them back.

Upward and onward

The most successful businesses – irrespective of size – need fast and unlimited pricing capabilities behind them. If you want to find out how to make price rises work for your business in the second half of the year and beyond, talk to us today.