Monitoring Price Increases? Pay Attention to Mattel

While in Hong Kong, I reported  a broad range of price increases and predicted that they would settle in the area of high single to low double digits.  So it was with great interest that I saw Mattel’s report this week of price increases in the 5-9% range.

CNNMoney, in an article entitled “Update: Toy Prices on the Rise at Mattel” reported that”Mattel will pay higher costs to make its toys to account for safety issues. It also faces increased commodity, labor and vendor expenses.  To counter those costs, the company plans to raise prices by 5% to 9% on its fall product line that will be on the shelves for the 2008 holiday season. In the past, Mattel typically has increased prices by less than 5%.”

This information is important for two reasons:  First, it is at the lower spectrum of what is anticipated so that is good news for consumers, retailers and anyone who imports.  Secondly, it provides the rest of the industry a key baseline in judging the price increases they are being quoted.  There are many factors that go into a price increase and they can vary by product sector.  In addition, Mattel has far more leverage over its suppliers than most companies.  Still, if you receive a price increase, one place to begin your discussion with the supplier may be the Mattel 5% to 9% price increase.