As operational costs rise, cereals giant General Mills has announced a corresponding price rise for consumers, as its Big G cereals go up by an average of 2.1%. For a box of cereal currently selling for around US$3, this roughly translates to an increase of around seven cents.
Golden Valley-based manufacturer of Wheaties, Cheerios and Lucky Charms is confident that annual sales will continue to grow in terms of double figures, but spokesman Greg Zimprich maintained that the “price increases in energy, ingredients and packaging” needed to be addressed.
Other manufacturers are expected to follow hard on the heels of General Mills with similar price hikes. Until now, fear of losing more market share to the sector’s majors has been enough to keep prices low, but the move will prompt smaller competitors to relieve the pressure on margins squeezed by increasing operational costs.
General Mills had not raised its prices since April 1999.