Business Standard

McDonald's to Coca-Cola: Why are CEOs suddenly obsessed with 'elasticity'?

The economic concept, which describes consumers' sensitivity to prices, is a hot topic as inflation soars and executives fret about profits


As companies raise prices to cover their own rising costs, they are making bets on elasticity

Jason Karaian and Veronica Majerol | NYT
From McDonald’s to Coca-Cola to Hershey, corporate executives lately are preoccupied with inflation and what it means to the bottom line. And on calls in the past few weeks with investors about their financial results, conversations have dwelled on a peculiar way of talking about it: “elasticity.”

They were not referring to waistlines during the pandemic, but an economic concept that says a lot about the precarious state of the consumer. Despite the fastest inflation in decades, consumer spending has held up relatively well so far. But this may not last, and that’s where elasticity comes in.

The price elasticity

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First Published: Aug 19 2022 | 10:12 PM IST

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