When inflation hits, brands have to decide whether they’ll increase their prices, take a hit to their margin, or cut costs — sometimes, they do all three.
Additionally, they must figure out how to respond to consumers, who are more selective about what they buy when their dollars don’t go as far. And while they’re less inclined to spend freely or follow through with big purchases, consumers seek and embrace alternatives to experiences they care about.
For instance, instead of eating out at restaurants, they’ll start cooking and entertaining more at home. Rather than going to bars, they’ll have friends over for homemade craft cocktails.