The pricing and affordability debate is heating up, and it's likely to get even more politicized ahead of the 2026 midterms.
Why it matters: Rising costs remain a vulnerability for the Trump administration and the Republican Party, and the president can blame the "Biden economy" for only so long.
- The next most likely target: corporate America.
State of play: 2026 has already brought higher-than-usual price increases for utilities, electronics, appliances and other household staples.
- Home electricity prices are up 6.3% and natural gas service 9.8% in the last year, while prices for ground beef have jumped 17.2% and coffee 18.3%, according to the January Consumer Price Index.
- Companies can no longer absorb the costs imposed by Trump's tariff policies, and brands like Stanley Black & Decker, McCormick & Company and Levi Strauss recently announced price increases.
The big picture: Businesses say higher wages and rising health insurance costs are also key drivers of price hikes, beyond the tariffs, per the Wall Street Journal.
- Meanwhile, job creation has remained stagnant over the last year and white-collar jobs have declined amid potential AI disruption.
Zoom in: These factors put companies at the center of a high-stakes economic narrative, and some major U.S. brands are recalibrating their messaging.
- McDonald's, for example, has made affordability central to its consumer messaging after raising prices roughly 40% since 2019.
- The company recently rolled out $5 meal deals and promoted $8 nugget bundles, while executives emphasize a renewed focus on "value leadership" to win back lower-income customers.
- And it's working, according to McDonald's CEO Chris Kempczinski. "By listening to customers and taking action, we've improved traffic and strengthened our value and affordability scores," he said in a LinkedIn post.
Earnings calls increasingly feature language about consumer strain and efforts to "absorb costs" where possible.
- For example, executives from PepsiCo and General Mills cited affordability concerns and economic strain, and each announced lower prices on some products.
- "For some consumers, low- and middle-income consumers, the biggest friction they have today in our category … is affordability," PepsiCo chair and CEO Ramon Laguarta said in a recent earnings call. "So we have been testing multiple ways to give them affordability."
Between the lines: Aside from lowering prices, some corporations are releasing and promoting detailed economic impact reports —which highlight contributions to the U.S. economy, job creation, community investments, supply chains and more — to get ahead of the blame game narrative.
- "Historically, we already had economic impact studies done in a few countries, but we hadn't really promoted them. We were late to the game in terms of really getting out of telling that always-on story," said a communications executive at a recent Chatham House rules breakfast in Davos.
- "But we saw that once we turned them on, it turned the tide. ... We were down 30% in terms of boycott sentiment for our business, and it was because the economic impact study helped people understand how [the company] is a part of their global community."
What to watch: Trump has called the affordability issue a "Democratic hoax," but as his term progresses, voters are more likely to judge prices within the framing of his policies.
- If household budgets remain strained, the political incentive to redirect blame — toward corporations, retailers and consumer brands — will intensify.
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