Proctor And Gamble, Merrill Zegarra, Sarah Jowitt discussed on Marketplace with Kai Ryssdal
All right inflation now in a behavioral economics kind of way proctor and gamble reported earnings. This morning made plenty of money of course but the company said its costs are going up which means the prices p. and g. charges. You and me are going up to september. Probably general mills. And kimberly clark said essentially the same thing but consumers are only gonna pay so much for stuff before they cut back or start looking for cheaper alternatives and the challenge is marketplace merrill zegarra reports is working out exactly what that price point is. Yeah prices are going up on. Everything and sarah jowitt in california has noticed like it costs more to go out to dinner. You definitely have this idea in your head you know. I'm going to go to this restaurant. And it's generally this amount for us. But i generally get the same thing. I'm kinda boring that way. So she's been cutting back skipping the soda or the bigger entree but the key here is that she knew prices went up. A lot of this is driven by do people notice mark. Bergen is a marketing professor. At the university of minnesota's carlson school of management anything essential that we frequently purchase. We noticed a lot but for one time purchases or splurges. He says people pay less attention to price now. If someone needs an item like diapers or laundry detergent they probably won't forego it altogether but they can look for substitutes. Tim smith is. Ceo of the consulting firm wig loft pricing or biggest issue. That matters is how close is the substitute what. What is my alternative to bind that product. How people respond to price hikes depends on something else to how financially secure they feel. That's about their finances but also their expectations. Colorado resident me set. Flora sand is cutting back on whatever she can right now. Almost every aspect of the economy just seems like it's kind of slipping away from her fingers whether that's buying a house or looking for a new rental property or just day to day purchases with prices rising in her.