(Bloomberg) — Colgate Palmolive (NYSE 🙂 Co. stated that the current wave of price increases on household items will likely deter some buyers.

Like its peers, Colgate has started to charge more to deal with elevated raw materials and logistics costs, and it’s now watching for shoppers’ reaction. Given the magnitude of the price hikes, “you will see a fall off in volume,” Chief Executive Officer Noel Wallace said Friday during the company’s fourth-quarter conference call. 

Since price increases are broad-based across the industry, Colgate expects the reaction won’t be as sharp as it normally would be. The company’s organic sales, which strips out currency swings, grew 3% in the fourth quarter — but the volume of products sold was flat compared to a year earlier.

After adjusting for inflation U.S. consumer expenditures fell by their highest level since February. Americans are readjusting their spending due to a new Covid-19 surge and high inflation for nearly 40 years. While revenue will likely rise for companies, the increase in sales will be driven by higher unit prices rather than more units.  

Church & Dwight (NYSE:) also reported similar trends, stating Friday that although its fourth quarter organic sales growth was higher than its forecast, it was due to rising prices. Volume dipped 1.7%. 

Colgate expects to spend as high as $240million before taxes in order to improve its supply chain efficiency and lower costs. It’s expected to save as much as $110 million annually, with the benefits starting to be observed in the second half of the year. In order to maintain customers, the company plans on making their products more appealing. 

Colgate stock fell 0.7% during New York trading hours at 12:52 PM. However, this stock’s gain was lower than the Consumer Staples Index’s 16% gain. It had gained 6% over the past 12 months. Church & Dwight shares rose 3.5% Friday; the stock had gained 12% in the year through Thursday. 

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