Hershey warns of sticker shock from chocolate price hike
Published on Jul 25, 2014 3:07 AM
NEW YORK (Reuters) - Hershey Co, one of the world's best known names in chocolate, expects its first price hike in three years to crimp short term sales, but over the long haul the popularity of chocolate will prevail, the company's chief executive said on Thursday.
President and CEO John Bilbrey said the 120-year-old maker of Hershey Kisses and Reese's Peanut Butter Cups will be particularly alert to any reduction in sales caused by the increase, which averaged 8 percent, among low income consumers.
Mr Bilbrey told analysts on a conference call to discuss second-quarter financial results that in the past many consumers adjusted to higher prices "over time," but he said more expensive chocolate would lower volume for the rest of the year, primarily in the fourth quarter and into 2015.
Hershey announced its price increase on July 15, saying it was in response to soaring cocoa and dairy prices. The hike comes at a critical time for candy makers, as some of the world's best known brands are fighting for U.S. consumers in a shrinking market.
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