• 6 min read
• Published on 15 August 2025
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View the full Basket:Navigating Inflation: Companies With Pricing Power
Well, colour me surprised. The economists, bless their cotton socks, were caught completely off guard by the latest wholesale price figures. A jump of 0.9% when they were expecting a gentle 0.2% rise. It seems the inflation beast we all thought was slumbering might just have one eye open, and it’s looking rather peckish.
For most businesses, this is dreadful news. It means the cost of everything from paper clips to paint is going up, squeezing their profits until the pips squeak. But for a shrewd investor, this is where things get interesting. This is the moment that separates the truly robust companies from the ones that were just getting by on cheap credit and a fair wind.
View the full Basket:Navigating Inflation: Companies With Pricing Power
What is this magical quality that allows some firms to sail through an inflationary storm? It’s called pricing power. In simple terms, it’s the ability to raise your prices without your customers running for the hills. Think of your favourite coffee shop. If they put the price of a flat white up by 20p, would you stop going? Probably not. That’s pricing power in action.
Most companies don’t have this luxury. They operate in crowded markets where the slightest price hike sends customers scurrying to a competitor. When their own costs rise, they have to absorb the hit, watching their margins evaporate. To me, investing in a company without pricing power during a period of inflation is like betting on a horse with only three legs. It might be cheap, but it’s unlikely to win you the race.
View the full Basket:Navigating Inflation: Companies With Pricing Power
Let’s look at a few examples. Take a company like Pricesmart, which runs membership warehouse clubs. Their customers pay a fee to get access to bulk goods. When Pricesmart’s costs go up, they can pass a chunk of that on. The members, already invested and with few comparable alternatives, tend to stick around. It’s a beautifully simple model that provides a natural defence against inflation.
Then you have the less glamorous but equally potent players like Powell Industries. They make specialised electrical equipment for critical infrastructure. Now, if you’re running a power station and a vital piece of kit breaks, you don’t spend three weeks shopping around for the cheapest quote. You pay what’s asked because the cost of not doing so is catastrophic. That gives Powell enormous leverage. It’s a business built on necessity, not fleeting consumer desire.
Even in the digital world, you can find this trait. Cimpress, the company behind Vistaprint, has built a platform for customised printing that is incredibly convenient for small businesses. Could a small business owner find a cheaper local printer? Perhaps. But the time and hassle involved mean they’ll often just pay the slightly higher price for the ease of use. That convenience is the source of their pricing power.
View the full Basket:Navigating Inflation: Companies With Pricing Power
The lesson here isn’t to rush out and buy these specific stocks. Rather, it’s to start thinking like a business owner. Ask yourself, if this company’s costs went up by 10%, could it confidently raise its prices by 10% without losing its shirt? If the answer is yes, you might be onto something. This is the core idea behind a collection of companies I was looking at recently, aptly named Navigating Inflation: Companies With Pricing Power.
Of course, no investment is without risk. A severe economic downturn could make even the most loyal customers think twice. And there’s always the chance that central banks will overreact, hiking interest rates so aggressively that they crash the whole party. But as a long term strategy, I think backing businesses that control their own destiny, rather than being at the mercy of their suppliers, is one of the most sensible things an investor can do. In a world of rising prices, you want to own the price makers, not the price takers.
View the full Basket:Navigating Inflation: Companies With Pricing Power
View the full Basket:Navigating Inflation: Companies With Pricing Power
View the full Basket:Navigating Inflation: Companies With Pricing Power
View the full Basket:Navigating Inflation: Companies With Pricing Power
View the full Basket:Navigating Inflation: Companies With Pricing Power
View the full Basket:Navigating Inflation: Companies With Pricing Power
This article is marketing material and should not be construed as investment advice. No information set out in this article be considered, as advice, recommendation, offer, or a solicitation, to buy or sell any financial product, nor is it financial, investment, or trading advice. Any references to specific financial product or investment strategy are for illustrative / educational purposes only and subject to change without notice. It is the investor’s responsibility to evaluate any prospective investment, assess their own financial situation, and seek independent professional advice. Past performance is not indicative of future results. Please refer to our Risk Disclosure.
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