Pricing Strategies of Regional Firms: Results From Our September 2026 Survey

Regional Matters

October 1, 2026

Introduction

Since the COVID-19 pandemic, persistent unpredictability of input cost has pushed many firms to rethink how they price. In the last six years, the global pandemic, supply chain shortages, labor shortages, tariffs, and geopolitical conflicts have put upward pressure on the costs firms are facing. In some cases, the combination of steady demand and technological improvement has allowed firms to increase the prices they charge their customers with less resistance - a phenomenon most obvious during the high inflation of 2021 and 2022. More recently, we found that customer resistance and fear of losing market share have prevented many firms from increasing prices as much as they would like.

To better understand how businesses are thinking about their current prices, we asked firms in our September business survey a series of questions about their pricing strategies. We found that respondents are adjusting their prices more frequently than before the pandemic. Firms have also adopted pricing strategies, such as customer-specific pricing and inflation/index-based pricing to manage unpredictable input costs.

Changes in the Frequency of Price Adjustments and Expectations for the Future

As we have illustrated in our manufacturing monthly survey report and our non-manufacturing monthly survey report, input cost growth among our survey respondents increased notably in 2021, peaked in 2022, flattened out in 2024, and then started to pick up again in 2025, particularly among manufacturers. Although average price growth for manufacturing respondents came down to pre-2020 rates before they picked up again, non-manufacturers never got back to the average input price growth that was common before the global pandemic.

In our September 2026 business survey, we found that compared to before COVID-19, more firms are adjusting prices on a quarterly, or even weekly, basis. One Virginia firm reported they were:

"changing prices more often and adding more 'soft' charges."

A business in North Carolina that reported changing their pricing strategy in response to more frequent cost changes wrote:

"Historically, we adjusted pricing one to two times per year, but starting in 2025 and accelerating in 2026, [we expect] to adapt a more dynamic and frequent pricing strategy ... we are adapting our models and processes to handle more frequent price changes."

Even with more frequent price changes, some firms still report difficulty keeping up with cost increases. One construction-adjacent firm that is changing prices more frequently reported that they historically adjusted prices annually to coincide with price changes from suppliers. They now review pricing models twice a year but said:

"Even with this adjustment, we are unable to keep up with the speed of cost changes within our industry."

Firms' Attitudes About Pricing Adjustments

Although firms cite adjusting prices more frequently, many report increased difficulty adjusting prices. Thirty-seven percent of responding firms found it harder than last year to adjust prices, although a plurality of firms (45 percent) found it neither easier nor harder. There was some variation among sectors. Non-durable goods manufacturers were more likely to report that it was both harder and easier to adjust prices, while durable goods manufacturers were the most likely to report no change.

Firms' Reported Strategies for Adopting Price Adjustments

In response to increased difficulty adjusting prices, most firms (83 percent) have been adopting alternative pricing strategies. Most commonly, firms started using personalized or customer-specific pricing. Almost one-third of firms used inflation-linked or index-based pricing, and another quarter used dynamic pricing. Firms reported other strategies, too. For example, a South Carolina firm wrote that tariffs drove them to:

"seek a price recovery vehicle (surcharge) that is linked to tariff exposure for each product and offers customers the opportunity for surcharge recovery if some or all of the tariffs are deemed illegal in the future."

What Businesses Are Telling Us About Pricing

Rising and unpredictable costs - particularly for labor, inputs and fuel - have characterized the operating environment for many Fifth District firms over the past several years. This has prompted many to adopt not just more frequent, but also larger price adjustments. When asked about their pricing strategies, firms pointed to several drivers behind this shift: having better cost management, staying competitive, and taking advantage of new technology-enabled pricing tools. At the same time, many firms remain wary of adjusting prices too often, citing concerns about client relationships.

These dynamics are reshaping how firms are approaching pricing altogether. A coffee roaster explained that in "normal" times, they typically reviewed prices once or twice a year. However, starting in 2025, they moved to a more dynamic, near-real-time pricing strategy to better manage volatile input costs and shifting customer demand. A small lumber mill reported adjusting prices weekly in response to softening demand and increased competition. Other firms described onboarding new systems to manage pricing more effectively. An air conditioning repair company reported:

"Prices are changing more frequently during the calendar year than they used to, which forces the company to do so as well. Labor costs keep increasing at a steady pace. AI is making it easier to interpret data, leading to faster results."

Together, these shifts in costs, demand, and technology are changing not only how often firms are adjusting prices, but how they are thinking about pricing altogether. Understanding firms' price change frequency, size, and strategy is critical to understanding how price growth among firms - and thus inflation - will evolve.

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.