Berkshire Hathaway traders who wanted a sugar rush at Saturday’s annual assembly have been in luck. Berkshire-owned See’s Candies and Dairy Queen each had in style cubicles on the exhibit flooring.
“Folks want their sweet,” mentioned See’s Candies president and CEO Pat Egan. However inflation is a priority.
Egan famous that See’s has raised costs for some merchandise because of larger prices for substances and packaging. However he added that lots of what the corporate wants to provide its sweet is sourced from America, which signifies that there are fewer worries about larger abroad delivery prices.
Egan mentioned final yr was the corporate’s greatest yr for gross sales ever, with income up 26% from pre-Covid ranges of 2019. He added that e-commerce gross sales have been particularly sturdy.
Dairy Queen CEO Troy Bader mentioned the ice cream chain can be doing nicely, particularly because it has added rooster strips, burgers and different lunch gadgets to the menu.
Nonetheless, inflation is a giant situation for its customers.
“Inflation is scorching. Shoppers are spending extra on housing, gas for our autos, utilities. heath care, on and on and on. The discretionary earnings we’ve is smaller,” Bader mentioned.
He added that larger labor and gear prices are a problem for Dairy Queen franchisees too. That is why many have chosen to lift costs for some menu gadgets.
However Bader mentioned Dairy Queen franchise operators need to “thread the needle” as a result of the chain would not need to lose prospects. Worth hikes are essential to guard revenue margins. The danger although is that customers could get turned off, which might damage gross sales.