Babies are a blessing. They bring joy to our world and purpose to our lives. However, they also have a tendency to make things a little bit messy from time to time.
Hence, parents of newborns tend to spend inordinate sums on diapers and baby wipes. Unfortunately, keeping your baby clean and dry is about to become a whole lot more expensive. The two biggest manufacturers of diapers and baby wipes have recently announced plans to hike prices on undergarments for the infant set.
After reporting a 9% decline in profit this week, Kimberly-Clark
What's it mean to you?
If you're a new parent (as I am), or a parent-soon-to-be (as I also am), now might be the time to stock up and save on this family essential, by buying diapers in bulk ahead of the price hike. According to The Wall Street Journal, Kimberly and P&G feel a need to raise prices to keep up with soaring commodity costs on wood pulp, resin, and other diaper "inputs." They also feel insulated from a consumer backlash, since research shows parents are unwilling to switch brands to save money when their baby's comfort is on the line.
An alternative, therefore, would be to prove the companies wrong and switch to cheaper brands. Costco
Speaking of which, if you're a parent and an investor, now might be a good time to begin hedging against the price hike in other ways. You can reduce the pain by playing both sides of the table, buying stock in Kimberly or P&G so that you'll essentially pay higher prices to yourself. Now might also be a good time to stock up on warehouse store stock, or Amazon.
With any luck, the high cost of bringing up baby may help you to clean up as well.
Costco and Wal-Mart are Motley Fool Inside Value picks. Amazon.com and Costco are Motley Fool Stock Advisor recommendations. Wal-Mart is a Motley Fool Global Gains choice. Kimberly-Clark, Procter & Gamble, and Wal-Mart are Motley Fool Income Investor selections. Motley Fool Options has recommended a diagonal call position on Wal-Mart. The Fool owns shares of Costco, and Wal-Mart.
Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. Check out his latest stock recommendations on Motley Fool CAPS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.