Cramer says companies must roll back prices: ‘It may be time for a giant reset’

CNBC’s Jim Cramer on Wednesday opined on pervasive inflation, saying companies must bring down prices if they want to attract consumers in the current economic landscape.

“Companies are so reluctant to take prices down because they don’t want to hurt their treasured gross margins,” he said. “But I think it may be time for a giant reset.”

Though prices may have stopped rising rapidly, Cramer said that doesn’t mean they’re coming back down, and he suggested many companies are in denial about the need for rollbacks.

He gave a few examples, saying that some liquor companies won’t consider high costs as a reason for declining sales and instead wonder if a younger cohort of consumers are prioritizing healthier diets. He also attributed some of the issues at Nike to inflation, saying they’re “emblematic of how higher prices are changing the face of business.” The sneaker retailer delivered a mixed quarter on Tuesday, beating earnings expectations but falling short on revenue and withdrawing full-year guidance.

While consumers protest higher prices, Cramer said they — and Wall Street — are responding well to companies that offer bargains or have reduced prices. McDonald’sextended its $5 value meal this year to bring in lower-income customers, and Cramer noted its stock has rallied substantially since then. He also pointed out that Amazon, Costco and Walmart have notched gains, with the megacap up about 21% year-to-date and the big box retailers up about 33% and 52% year-to-date, respectively. He added that companies that roll back prices can offset the costs with volume.

“I think we’ll look back on 2024 as the year when the public took matters into their own hands and stopped buying goods with inflated prices from stores that refuse to lower them,” Cramer said. “The result? Fired CEOs and crushed stock prices for all those who refused to heed the thunder, the thunder of those angry consumers who finally just said ‘no’ to the scourge of inflation.”

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