Inflation's Effect on Consumer Packaged Goods.

Price increases at the shelf may slow next year as a majority of consumer packaged goods manufacturers and retailers believe price points are "more important" in today's marketplace, and fewer than 40% of product makers say they plan to increase their list price in the first half of 2023, according to a report by Advantage Sales, Irvine, Calif.

When list price bump-ups occur, 62% of retailers say they are passing most of the increase to the shelf, but still compressing their margins. Just five percent say they are raising retails higher than the increase to enhance their margins.

"We're seeing manufacturers and retailers considering and implementing new tactics to combat the effects of inflation on their costs and on shoppers' price sensitivity and the negative impact of continued supply chain challenges," says Jill Blanchard, president of Client Solutions for Advantage. "In some areas, they're on the same page and working together for mutual benefit, but there are areas where their individual goals may be at odds with those of their business partners."

Blanchard points to other key findings in the report, among them:

* Manufacturers' most-cited strategies for navigating inflationary costs in the first half of 2023 are investing in supply-chain efficiencies and enforcing existing payment terms.

* During the past six months, six in 10 surveyed manufacturers have decreased their trade spending. Eight in 10 are planning to...