A charcoal brand's failed price hikes are a perfect example of 'greedflation' gone wrong
Walmart; Marianne Ayala/Insider
- Clorox's Kingsford raised prices on charcoal early this year as it prepared for grilling season.
- But consumers bought cheaper brands instead, leading to market share losses for Kingsford.
- Most consumers are wary of "greedflation," or when companies raise prices to pad their profit.
The company that owns Kingsford charcoal just got burned by its own price increases.
Like many consumer products makers, Clorox raised prices during the last quarter, Reuters reported on Tuesday. That included price hikes on Kingsford, Clorox's charcoal brand, CFO Kevin Jacobsen told Reuters.
There was just one problem: Competitors, including store brands at retailers like Walmart, didn't increase prices as fast, Jacobsen said. According to Reuters, eight pounds of Kingsford Original Charcoal briquettes, for instance, cost $7.92 on Walmart's website this week. But for four cents less, shoppers could get 16 pounds of charcoal if they bought Walmart's Expert Grill brand instead.
As a result, Kingsford lost market share to competitors, Jacobsen told Reuters.
Now, the brand is working "with retailers to better feature the product in stores" before Memorial Day. Jacobsen said that half of Kingsford's annual sales happen in the three months through the end of June.
"You don't get it right in every country, every category," he said. "We're going back and making some adjustments."
A Kingsford spokesperson did not clarify what that action would involve and directed Insider to executives' remarks on Clorox's earnings call.
CEO Linda Rendle told analysts on the company's earnings call on Tuesday that Kingsford is "laser-focused on any price gap issues that we have."
Prices have been rising on consumer goods from cereal to cosmetics since the early days of the pandemic. Lately, the supply chain troubles that led to many of those early price increases have abated, but many companies have continued to raise prices, increasing their profits even if sales volumes don't go up.
The phenomenon, called "greedflation," is particularly obvious among prices for food and related goods. A recent survey found that 80% of consumers think that companies are using inflation "as an excuse to hike prices" beyond their input costs.