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Inflation worries influence consumer behavior; how do companies respond?

Several product categories have seen costs spike during the pandemic. While supply chains get plenty of well-deserved blame, there are more reasons than that.  These videos might provide an opening to discuss this topic in class. The Wall Street Journal video “The Surprising Ways Inflation is Hitting Diapers” (August 4, 2021), describes how diaper makers costs have risen – everything from raw materials to freight costs. In addition, changing demographics (fewer babies born) has the two big diaper companies raising prices to offset lower unit sales. The result has been an increase in diapers prices of 12% in the last year.

Along the same lines, coffee prices have also soared (up more than inflation over the last five years)– see another WSJ Video Your Coffee Is Getting More Expensive. Here’s Why.” This article describes how shipping costs have contributed to those rising prices. Together, these articles can show your students how prices are influenced by demographic trends, raw material costs, and freight costs. And coffee (maybe diapers) are product categories students understand.

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