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"One movie ticket + two milk teas, one hundred yuan bill is gone." Xiao Jia, who is in a second-tier city, can't help but sigh at the sharp rise in prices.
In fact, as long as you are careful enough, you will find that many commodities around you are rising in price. New energy vehicle companies collectively raised prices, Tesla Model Y rose by 20,000; international oil prices hit a new high in 7 and a half years, domestic oil prices are expected to "four consecutive rises"; Starbucks raised prices twice in 4 months, H&M shirts can not afford to wear... Behind the soaring of all things, it reflects the pressure of global inflation.
Consumer prices are rising, and these brands are going crazy
On February 16, Louis Vuitton, the world's largest luxury brand, announced a comprehensive price increase. It is understood that the price increase of Louis Vuitton is an average of 10%, and the increase of different styles is different. Some media have calculated the magnitude of LV's current round of price increases and found that the price of LV classic Neverfull rose from 12,000 yuan to 14,400 yuan, an increase of 20%; the price of Capucines rose from 46,500 yuan to 52,000 yuan, an increase of 11.8%; and the most violent increase was Mini Pochette Accessories (commonly known as "small mahjong bag"), the price rose from 3500 yuan to 5400 yuan, an increase of 54%.
As we all know, the price increase of luxury goods has always been commonplace. According to statistics, LV has made price adjustments in October 2019, January 2020, September 2020 and January 2021. With LV quite "tacit understanding", chanel, Dior, Hermès and many other well-known luxury brands have announced price increases in early 2022. A certain electrical commodity station even took stock of the "Ten "Wealth Management Packages" in 2021", of which the largest increase in the package was THE CELINE ROMY armpit bag, and the price rose from 10,000 yuan to 19,500 yuan, an increase of up to 95%.
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Recently, there are not a few foreign brands that have announced price increases.
Recently, coffee giant Starbucks has been on the hot search for quietly increasing prices. Titanium Media App noted that the price of some Starbucks products increased by 1-2 yuan. Among them, mocha is 35 yuan-36 yuan, velvet latte is 41-42 yuan, like American coffee, latte coffee is 1 to 2 yuan more expensive than before.
Fast fashion brands that used to be known for being cheap are now unstoppable. According to a report by market research firm Lectra, from august last year to the end of last year, ZARA and H&M raised prices by 23% and 13%, respectively. Among them, the average price of ZARA rose from 31 euros to 38 euros (about 223 yuan to 273 yuan); the average price of H&M rose from 24 euros to 27 euros (about 173 yuan to 194 yuan).
Not to mention the average movie ticket of 52.8 yuan, how many viewers were dissuaded? There are also unaffordable video memberships, unaffordable gasoline, unaffordable instant noodles, unaffordable milk tea... It seems that except for the fact that wages are not rising, everything is rising.
The logic behind price increases
The luxury goods industry picked up rapidly after the epidemic. According to the financial report, LVMH Group's full-year sales in 2021 reached 64.2 billion euros, an increase of 44% year-on-year, and net profit reached 12 billion euros, up 156% year-on-year. The Group's Fashion & Leather Goods business hit an all-time high in the fourth quarter, with revenue up 46% year-on-year and accounting for almost half of lvmh group revenue. This may be the basis for LV to dare to increase prices.
Secondly, regular price increases are a common means to ensure the high added value and scarcity of brands. Diana Nguyen, founder of second-hand luxury retailer LuxSecond Chance, said that if luxury goods become easily accessible, they will lose their influence and value.
However, in the context of the global epidemic instability and supply chain crisis, the luxury industry is not facing less pressure than other industries. As for the reasons for the price increase, LVMH said in an official statement that the price increase took into account changes in production costs, raw materials, transportation and inflation. Previously, Bernard Arnault, chairman and chairman of the LVMH group, also mentioned in the latest annual financial report that the price increase was to protect profit margins in the current inflationary environment.
It is undeniable that the price increase of luxury goods has its own set of logic. However, the global inflation and supply chain crisis triggered by the epidemic are common causes of the price increase of consumer goods.
Starbucks has made it clear that the price increase is due to rising inflation, broken supply chains and rising labor costs. In this regard, Starbucks CEO Kevin Johnson also confirmed: "Starbucks expects to continue to raise prices in the coming months to cope with the profit squeeze caused by inflation and labor market problems related to the epidemic. ”
According to CCTV News, the consumer price index report recently released by Brazil's National Geographic and Statistics Agency shows that between January 2021 and January 2022, the price of coffee powder rose by 56.8%, ranking first among all goods. In January 2022 alone, the increase reached 4.75%. The price of high-quality Arabica beans hit a 10-year high, and coffee inventories have fallen to a 22-year low, according to other data.
Facing the same fate are fast fashion brands. Fast fashion brands are rising sharply due to soaring prices of raw materials such as cotton, wool and recyclable fabrics and unstable supply chains.
Source: Wind Guojin Securities Research Institute
The data shows that the price of long-staple cotton has risen slightly since April 2020 and soared since July 2021, and the current price is approaching 5,000 yuan / ton, an increase of about 100% over the early stage of the epidemic. From the perspective of the proportion of fabric components, cotton and polyester fiber and recycled fabrics of these two ingredients are still the main fabrics used by ZARA and H&M, accounting for nearly 60% of the total use of fabrics by the two brands.
Tightening or loose? How China responds
After the outbreak of the epidemic, European and American countries represented by the United States began to release water. Today, the world is suffering from the backlash of monetary excess.
Inflation in the US has continued to rise since last April. According to the latest data released by the U.S. Department of Labor, the U.S. Consumer Price Index (CPI) rose 7.5 percent year-on-year in January, well above economists' expectations of 0.4 percent and a four-decade high since 1982.
Coinciding with the outbreak of the Russo-Ukrainian War, concerns about the worsening of global inflation have sparked. Ping An Securities Research Report pointed out that the risk of "out of control" of the current inflation expectations in the United States has risen. The team predicts that the level of inflation in the United States will remain higher than before the new crown epidemic this year; and the growth rate of inflation in the first half of the year may be higher than in the second half of the year. In the first quarter, the CPI peaked year-on-year (peak or difficult to break 8%), the second quarter fell but may still be higher than 5%, the third quarter decline or will not be particularly obvious, the fourth quarter in the neutral situation or fell back to about 4.5%.
Many institutions believe that in order to avoid repeating the mistakes of the 70s, the Fed should increase its balance sheet reduction efforts and lead to tightening. Goldman Sachs even judged that the Fed would raise interest rates seven times in a row in 2022. And higher-than-expected inflation has sent the possibility of a 50-basis point rate hike from the Fed's March meeting soaring.
Investors are generally concerned about the domestic impact of the tightening of overseas policies. After all, China has been holding its ground until overseas currencies are overshooted; now the Fed is ready to raise interest rates, while China is beginning to ease. Behind this "opposite" approach is confidence in China's economic growth and the misplaced judgment of the economic growth cycle between China and the United States.
"The fundamental factor in the anchoring of monetary policy is mainly economic growth, and whether monetary policy between China and the United States is synchronized also mainly depends on whether the economic cycle is synchronized, and is not entirely driven by apparent inflation." Debon Securities pointed out that the current round of Sino-US economic cycle dislocation is characterized by China's economic growth ahead of the United States, which is significantly different from the previous rounds of cycle dislocation.
Usually due to the narrowing of the Sino-US interest rate differential, there will be a certain outflow of overseas capital, and the Sino-US interest rate differential and the amount of overseas securities investment often change in the same direction, but the sharp narrowing of the Sino-US interest rate differential caused by the previous round of US double tightening policy and the domestic easing policy did not trigger a serious capital outflow, but ushered in a peak of capital inflows in 2018. It is mainly due to the high resilience of China's economic growth, which has increased the favor of foreign capital, while the opening of China's financial market has attracted capital inflows.
The chief economist of CITIC Securities clearly believes that China's monetary policy independence is relatively high, and the impact of Sino-US monetary policy misalignment on capital flows is limited. (This article was first published on the Titanium Media App, and the author |.) Marjoan, Editor | Sun Cheng)