LOS ANGELES Hershey Co. has said that it will raise prices of all of its goods in the United States by about 10 percent. The company cited the rising costs of basic ingredients such as cocoa, peanuts and sugar and the effect on its profit as the reason for the price hike.
“Consumers are likely to see higher every day and promotional retail prices as we implement the price increase and, as a result, we expect volume in the fourth quarter and next year to be lower than previously estimated,” the company said in a statement.
Reports have stated that grocery prices in the United States have risen roughly 6 percent this year. Hershey said that it expects to see the prices of many commodities double in the 2008 to 2009 time period, and is adjusting its prices accordingly. The costs of ingredients including cocoa, corn sweeteners, peanuts and sugar are up by 20 percent to 45 percent since the start of 2008, the company said.
The company said that its 2008 profits were expected to be on the low side of projections [$1.85 to $1.90 per share], and that cuts to sales and earnings for fiscal 2009, will drive the price of its shares down by 4 percent. Overall for 2008, the company said it expected net sales to have a growth of 3 percent or 4 percent.
Additionally, Hershey reduced it growth projection for 2009 form 3 percent to 5 percent down to 2 percent to 3 percent.