Companies like Ben & Jerry’s could definitely be affected by high inflation because of the consumer spending. When the consumers are forced to pay higher prices for products or services that are a necessity, they cut back on products or services that are a luxury. Luxuries that are not a necessity to live like gasoline for vehicles or gas to heat homes or even food will not be bought. Any company that sells a luxury item that is not a necessity to live can be affected by high inflation.
With inflation, the price of everything goes up. With that said, the price for companies to buy supplies goes up, meaning that in order to cover their overhead, they will need to find a way to make that money back which could mean layoffs or raising the price of their goods or products.
In a recession, companies like Ben & Jerry’s could also face the possibility of being negatively affected because of the demand of consumers. Very much like inflation, recession has the same effect; the consumers do not want to spend their money on luxury items. With the recession, there are more people unemployed who are just barely getting by, therefore, will refuse to spend any money on something that does not decide whether they have a home or not, which includes a luxury item like ice cream. Ben & Jerry’s could also be affected because of their stock prices. During a recession, the price of stock usually declines. So, their revenue would be affected as well as their stock, which would result in bad overall performance of the company.
Speaking from personal experience, any luxury item that I absolutely do not need, I do not buy. I simply cannot put myself in a position to not pay a bill because I want to “treat” myself.
With all this said, Ben & Jerry’s provides a reasonably priced luxury item that I would consider a “feel-good” luxury item. Everyone loves ice cream, young and old. Consumers still need to have a quality of life with the changing economic conditions and if...
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