This news will leave a bitter taste: Hershey is raising prices this year.
The chocolate company said Thursday in its 2022 financial forecast that it is planning “list price increases across all segments.”
“Pricing is anticipated to partially offset investments in labor, along with higher logistics costs and raw material inflation,” the company said in a news release.
The venerable company behind Hershey bars, Reese’s and Kit Kat products is hiring to help relieve the pressure on overworked employees, CNN reported.
Steven Voskuil, the company’s chief financial officer, said during an analyst call that the prices of sugar, dairy, packaging materials and specialty ingredients are rising, the news outlet reported.
The company hopes the new hires will offset a potential shortage of candy as Valentine’s Day approaches. Many grocery shelves that used to contain chocolates already are empty, according to The Wall Street Journal.
“There’s a very big effort between now and Valentine’s to get absolutely everything we have in the hands of retailers,” Voskuil told the newspaper.
The candy aisle at the average store is currently out of stock of about 20% of its items, compared to 12% for the entire store, The Wall Street Journal reported, citing the IRI CPG Supply Index.
Despite the pandemic and impending shortages, Hershey still had some sweet financial news over the past two years.
In 2020, demand for candy and snacks grew as consumers were at home more often because of COVID-19, CNN reported. Retail sales of Reese’s, for example, grew close to 25% over the past two years, according to Hershey CEO Michele Buck.
Buck added that in 2021, retail sales of Hershey’s top candy brands averaged more than 12% in growth, CNN reported.
Hershey believes that customer loyalty will prevent defections despite higher prices.
“They don’t want to switch to another brand,” Buck said during Thursday’s analyst call.
However, she added, the company planned to exercise caution and not alienate too many consumers.
“We want to carefully keep our eye on the potential impact of a broad inflation on the consumer,” Buck said.
Hershey’s stock rose 2% on Thursday as it reported sales of $2.33 billion for the quarter, up from $2.19 billion in 2021, The Wall Street Journal reported.
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