Inflation Survey
Since the topic of inflation is such a hot topic on this board, I am interested in any anectdotal evidence people are seeing in the companies they cover. For example, UPS announced today they will be raising prices 4.9% next year. BUD said during their Q3 earnings call they will be looking to raise prices. PG, CL, SYY, and some of the others I cover have all seen marginal improvement in pricing over the last 12 months and expect it to continue in 2007. What are people seeing in their respective coverage areas?
posted by Odoacer at
10:38 AM
3 Comments:
The Asian massage parlor I go to just increased their pricing by 15%!!! shi**
Masseur: "Would you like me to finish you off"
Larry David: "yeah, sure, finish me off, go ahead and finish me off. Oh, Oh, stop, what are you doing?"
You're unlikely to see significant price increases in defense due to the nature of the customer (2-3%).
Pricing is very difficult to figure out in aerospace given that the market is much like the market. There's a list price, but no one pays it. And suppliers have very little leverage in dealing with Airbus and Boeing. That said, we're in the beginning of an aerospace bull market and supply for planes is very tight.
There's been obvious inflation in airline pricing. Or maybe its just pricing power. Whatever the case, a reduction in supply was exactly what these guys needed. I'd guess pricing is up about 10% YOY. And they're still trying to pass additional price increases through. Of course, fuel costs are up at least 5% YOY but that is offset by a significant decrease in labor costs (due to new pension laws).
Radio has typically been able to increase prices by 5-6% per annum. If anything, it will be lower than that this year. Should the Clearchannel LBO go through, there is a fair chance that Bain will increase the number of ad spots per hour which would mean a significant impact to radio pricing.
TV also typically increases prices by 5-6%. Pricing has been strong in Q4 of this year, but that is likely due to the increase in political advertising caused by a number of very tight political races.
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