Markups on household items started climbing years before the COVID-19 pandemic. Companies have realized just how much consumers will pay for the brands they love, says research by Alexander MacKay
Grocery bills may be ridiculously high these days, but supply chain problems, energy costs, and inflation aren’t the only factors to blame. New research suggests that companies are raising prices simply because they can.
In 2021, US companies logged their most profitable year since the 1950s, as many took advantage of economies of scale and other more efficient production processes. Yet, firms increasingly held on to the savings they gained from these reduced costs, rather than passing them on to customers in the form of lower prices.
This article was provided with permission from Harvard Business School Working Knowledge.