Pepsi Inflation & Unemployment
Pepsi is a major company that has lasted throughout many changes over the years. Due to Pepsi strong foot hold as a company many changes do not affect Pepsi in the long run but can impact them in the current market. Inflation is defined in economics; inflation refers to a general progressive increase in prices of goods and services in an economy (Team, 2022). Many of us are dealing with the reality of inflation in the housing market, lumber, and even in the food industry. The inflation has caused Pepsi to be affected. For example, now that restaurants, parks and other business are open there has been a surge in the request of distribution. The surge has a positive effect in the revenue produce by Pepsi (Team, 2022). However, we must also consider that with the surge now the company has to pay for inventory to be shipped out which is expenses due to the inflation of gas prices.
Pepsi can definitely be affected by the unemployment rate in the United States. Unemployment rates due to Covid is a big example of the effects on major business. If a company does not have enough workers, it tends to have a negative impact on the amount of inventory produce and delivered (Vanjani, 2021). When this happens, it can cause a company to outsource drivers, or have to close other facilities to maintain the commitment with their customer. The great thing is the unemployment rate can be solved for major companies like Pepsi by giving incentives to news employees like bonus pay for shift, extra paid time off, and even incentives with hitting quotas. The company’s profitability is directly affected by the number of employees creating the inventory.
Cited Source
1) Team, T. (2022). Trefis: Exxon, PepsiCo: Will inflation hedge stocks continue to outperform?. Newstex.
Vanjani, K. (2021). Pepsi was just the latest company to reveal inflation issues. its stock rose anyway. Barron's (Online),