Few months old now but the data continues to support this too. This article lists just one anecdotal example of a business owner who was afraid to raise prices but eventually had to and discovered he should have done it earlier because while the customers didn't like it, they didn't stop buying his product. It goes back to a couple of things, people have gotten used to higher prices, and my concern that people are just putting stuff on credit.
Customers have become trained to tolerate price hikes, said John Zhang, a professor of marketing at the Wharton School at the University of Pennsylvania.
“As a consumer during inflation, you know the costs for companies are increasing, so, therefore, you become more receptive to a higher price,” he said.
Approval of price increases could fuel even higher pricing in the future — a cycle that can be hard to break, said Zhang.
Mr. Mac’s mac and cheese restaurant in Manchester, New Hampshire tried boosting prices a little at a time to keep up with inflation in 2021, but it wasn’t enough to cover the cost increases to the business, vice president of operations Mark Murphy told CNN. Fearing customer backlash, the restaurant accepted smaller margins instead of pricing out their diners.
When the business finally hiked prices, Murphy said the decision was “painful.”
“We were looking at our sales and our orders daily, and we were checking every review to see what people were saying,” Murphy said. “It was very scary.”
Despite those fears, Mr. Mac’s elevated prices did not cut into business.
“What we ended up finding was customers may not have been happy about it, but they were not surprised. I think they kind of understood that prices are increasing. They see it everywhere they go,” he said.
Murphy said the restaurant has since raised prices more than once to keep up with inflation.
