Odd Lots Lots More on What Earnings Are Telling Us About Prices Now
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Feb 16, 2024 Samuel Rines, managing director at Corbu, offers sharp insights into corporate pricing strategies. He discusses how the 'price over volume' approach is fading, making way for a model focused on maintaining prices while boosting sales. The conversation also touches on the recent earnings season, highlighting Pepsi's performance and the ongoing trend of layoffs in the tech sector. Rines explores how companies adapt to economic pressures and the evolving relationship between pricing power and workforce dynamics.
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CPG Layoff Challenges
- Consumer product companies haven't engaged in substantial hiring, limiting layoff potential.
- They are focusing on volume growth, which necessitates workers, not layoffs.
Impact of Jawboning
- Presidential jawboning about prices may be politically advantageous but doesn't significantly impact corporate decisions.
- Companies lower prices only when advantageous, not due to political pressure.
Shifting Corporate Strategies
- Companies are shifting from "price over volume" to "price and margin" and "price and marketing."
- Increased gross margins fund brand building and advertising to boost volumes.