The trend: Pressure from rising expenses and cost-conscious consumers is forcing consumer-goods companies into split pricing strategies, raising prices where they have little choice and cutting them where shoppers push back.

Several have outlined price increases for this year:

• McCormick said it would boost prices to offset tariffs and higher ingredient costs.
• Hershey said its double-digit price hikes in 2025 to cover rising cocoa costs would boost revenues and profit this year.
• Nike said it planned “surgical price increases” to offset effects from tariffs, which could add about $1 billion to costs during the sneaker maker’s current fiscal year.

At the same time, other companies are cutting prices to win back consumers. Pepsi, Newell Brands, and General Mills have all lowered prices on select products, in some cases by up to mid-teen percentages, as consumers pull back on discretionary and nonessential items. Newell made cuts of up to 15% on Rubbermaid storage containers and about 4% on Graco baby products.

Some companies are trying to spur spending in other ways rather than make permanent price cuts. Kraft Heinz, for example, is implementing a $600 million investment plan that includes increased marketing, promotions, and selective price and packaging adjustments to improve value perception amid weak consumer sentiment. Coca-Cola is testing varied beverage container sizes, including mini 7.5-ounce cans priced under $2 in US convenience stores.

Affordability reset: Consumer pushback is behind these changes. Seventy-four percent of adults worldwide will switch brands or retailers if a rival offers a lower customary price, per a January Capgemini report. Consumers flocked to private labels last year, with dollar sales for those products rising 3.3% in the 52 weeks that ended in late December, almost triple the 1.2% growth of national brands, per the Private Label Manufacturers Association.

Implications for brands: Consumer-goods makers know they can no longer count on inflation-weary shoppers to accept price increases. At the same time, companies may need to recover higher input costs, whether caused by tariffs or other market forces.

Brands need to distinguish product portfolios that can weather price rises. Premium or differentiated goods are more ripe for increases, especially among brand-loyal consumers. For example, Nike can raise prices on high-demand products while standing down on price-sensitive goods. Companies need to identify which products have endurable pricing power and limit increases to those.

Middle-tier products that can be replaced by alternatives require more caution given consumer willingness to trade down. Here, brands should consider competitiveness—using targeted promotions, pack-size changes, or cost efficiencies rather than blunt price rises.

Brands that can decide where to pass through costs and where to hold the line thoughtfully will be able to protect margins and keep shoppers coming.