Corporations have no choice but to pass on high prices to consumers

By Ellen Simon

NEW YORK – Coming to a store near you: Even higher prices.

Most inflation this year has come from food and fuel, as retailers resisted passing along to strapped consumers the higher prices manufacturers charged them, but coming increases from companies such as Johnson & Johnson and Hasbro Inc. may leave them with no choice.

“While these increases have not for the most part been passed on at the retail level, it is inevitable that they will be at some point,” said Dean Baker, co-director of the Center for Economic and Policy Research. “Car dealers and other retailers cannot continue to absorb rising costs at the wholesale level and not pass some of these increases on to consumers.”

Sherwin Williams Co. on July 17 announced its third price increase in eight months. The company has been having “difficult discussions” with retailers, Chairman and CEO Chris Connor said during its quarterly conference call.

The price increases are “well supported with facts in terms of why the company needs them,” he said. “Our customers, to the best of their ability, are passing them on.”Wal-Mart Stores Inc. has been in the lead of aggressively keeping prices down, pressuring its competitors to do the same.

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“We have seen inflation and we have passed some of that through,” said John Simley, a Wal-Mart spokesman. “We have, wherever possible, worked with our suppliers to reduce the inflationary impact as much as possible.”

Associated Press Business Writer Anne D’Innocenzio contributed to this report.