Dilemma Over Pricing --- From Cereal to Helicopters, Commodity Costs Exert Pressure
General Mills Inc. said it will increase prices next month on a quarter of its breakfast cereals as a result of rising grain and other commodity prices, illustrating the pressures more companies face to pass along sharply higher costs on everything from corn to copper.</br></br>The Minneapolis food supplier said some cereals will increase by a "low single-digit" percentage rate effective Nov. 15. Kraft Foods Inc. is also raising prices, according to people familiar with the matter, although its scope wasn't clear. A Kraft spokesman declined to comment.</br></br>Across corporate America, more companies are wrestling with when and how much to raise prices as raw materials costs climb. The increases pose new hurdles to profits as consumers continue to resist increases.</br></br>General Mills is not alone in wanting to pass along the costs. United Technologies Corp., which builds helicopters, jet engines, elevators and air conditioners, expects to try and balance commodity increases with higher prices on its own products. Finance chief Gregory Hayes said Wednesday that higher prices for copper, oil and other commodities represent a between $40 million and $50 million expense "headwind" next year.</br></br>Food inflation, "including cheese and meats hurt our company-owned store margins" during the third quarter, Domino's Pizza Inc. finance chief Michael Lawton told investors Tuesday. Cheese prices were up almost 29% compared to a year ago, he said, "and food costs, cheese costs in particular, look to be higher in the fourth quarter versus last year," Chief Executive J. Patrick Doyle added.