The point is that natural inflation occurs when prices are adjusted based on rising costs. In many cases, however, companies are jumping on the bandwagon and increasing prices despite no increase in costs on their end. Jumping on the inflation bandwagon and increasing prices based on inflation just to ‘stay ahead’ may please the shareholders come dividend day, but they often conveniently forget about staying ahead of inflation when it comes to keeping salaries in line with price increases.
The point is that natural inflation occurs when prices are adjusted based on rising costs. In many cases, however, companies are jumping on the bandwagon and increasing prices despite no increase in costs on their end. Jumping on the inflation bandwagon and increasing prices based on inflation just to ‘stay ahead’ may please the shareholders come dividend day, but they often conveniently forget about staying ahead of inflation when it comes to keeping salaries in line with price increases.