This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

6 Companies That Raised Prices This Year

NEW YORK ( MainStreet) -- When times get tough, businesses generally have two options to improve their balance sheets: raise prices or cut costs.

Throughout the recession and since, companies have tended toward the latter by trimming payrolls, freezing pay and making their operations as lean as possible, while staying away from significant price increases for fear of alienating customers. More recently, though, many businesses -- including some big-name retailers -- have resorted to hiking prices as well.
Businesses big and small have resorted to price hikes to boost their profits this year, hitting you where it hurts: the wallet.

One survey released in August by Barlow Research Associates found that the majority of businesses (53%) with annual sales from $50 million to $500 million had raised prices during the previous 12 months, driven by the increasing costs of primary goods and services. Indeed, some very big-name retailers have hiked their prices to varying degrees, but in the process each risks alienating their customer base in the tough economy.

"When households are faced with financial stress, loyalty to products diminishes and customers will do whatever is necessary to maintain their standard of living in a way that is financially responsible," says Bernard Baumohl, chief economist at The Economic Outlook Group. "They will be willing to substitute, negotiate, see what competitors offer and postpone purchases on items."

Companies generally have an easier time raising prices if that increase is for essential products such as food and shelter that consumers need to buy, price notwithstanding, but according to Baumohl, jacking the price of nonessentials such as flat-screen TVs and vacations comes with a greater risk that the consumer might simply choose not to shop.

Even so, some companies feel this step is necessary to boost their profit margins. We picked out six major retailers that raised prices this year -- and in some cases did so multiple times.

1. Costco
Costco (COST) announced it would raise the cost of its membership by 10% starting next month, meaning customers will be asked to fork over $5 to $10 extra this coming year depending on which plan they have. This might seem like the kiss of death for a company that has built its success on affordability, but Baumohl expects it won't affect business too much.

"I don't think that raising fees at Costco will result in declines in membership simply because there is a perception that Costco is a place you go to purchase a broad array of goods at a discounted price," he says.

Raising the price might frustrate some, but it won't change their perception that the store has some of the best deals.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 -0.19%
FB $105.45 0.04%
GOOG $750.26 0.28%
TSLA $231.61 0.86%
YHOO $32.94 -0.66%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs