Strategic Movements September 2021

Campbell Soup Getting the Message

In early September, Campbell Soup Co. (CPB) announced that further price increases are expected to counter the rising costs of steel in cans and other materials. Mark Clouse, CEO, stated: “I think we’ve got more room. However, I do think there are still some boundaries.”  Stock price edged up from $42/share to $44/share in the three weeks following. 2020 Revenue of $8.6 billion and P/E of 13.9.

TSMC to Raise Chip Prices

Taiwan Semiconductor Manufacturing Co. (TSMC), the globe’s largest chip foundry, announced in late August plans to increase prices ahead of fall negotiations. Its most advanced chips, such as those used by Apple, are suspected to increase by 10%. Its less advanced chips, such as those used in automobiles, are estimated to rise by 20%. The price rise is primarily a reaction to chip shortages following the pandemic and sets TSMC on a path to have cash in their budget for a $100 billion facility expansion (yes, that is billion with a B). Expect Intel to be closely watching.

MCR Hotels Tests A la Carte Pricing

MCR Hotels, the fourth largest hotelier by room count, is charging for amenities that once were free.  Early check-in at about $20. Further surcharges for late checkouts, pool use at busy times, gym use, and even breakfast. A shift to charging for services but having a lower room rate would likely improve rankings on search sites like Expedia, but will they also create customer strife as business customers have to justify every expense. I don’t expect Marriot or Hilton to pursue this path quickly if their client base and purchase path differs.