Despite rising expenditure Companies unable to hike prices
Airlines are cutting prices despite the higher fuel costs. Domestic airfares fell 2.1 percent from June to July and 1.8 percent from July to August. The cost of jet fuel is up 10.8 percent since July 1 in New York trading.
The movie industry has in effect raised prices by charging an extra $3 or more for tickets to 3D movies. Wal-Mart, the world's largest retailer, has cut prices on detergent, cereal, and other items, but the price-cutting hasn't produced the sales or traffic the company had expected.
The consumer is very smart and in most products has figured out where they can get the best deal. Companies can only charge more if they offer a unique, higher-quality product, says Thomas Stemberg, the Founder and former Chief Executive of Staples.
Despite higher costs, many executives say they can't raise prices. Commodity prices aren't the only worry for cost-conscious corporations. New government rules are pushing costs higher in certain industries. Federal legislation reforming the health-care and financial systems could push up prices in those sectors.
Experts on SiliconIndia
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