Businesses in a Federal Reserve Bank of Richmond survey are changing prices more frequently than before the pandemic, while many find it harder to make adjustments. The results describe a tension for suppliers: waiting for an annual review can leave costs uncovered, but changing prices repeatedly can strain customer relationships.
In the bank’s September 2026 business survey analysis, published October 1, 20% reported monthly adjustments, compared with 14% before the pandemic. Weekly or more frequent changes accounted for 9%, up from 3%.
Some 37% said adjusting prices had become harder than a year earlier. The findings concern businesses responding in the Richmond Fed’s region, not a nationally representative estimate of every US company. The pre-pandemic comparison was collected retrospectively in March 2023.
The researchers describe businesses experimenting with customer-specific prices, index-linked contracts and other approaches. More frequent changes can include price reductions; frequency alone does not establish how quickly the general price level is rising.
A review is different from an automatic increase
A company can examine its prices without changing them. The review allows it to compare current selling prices with the cost of supplying the product or service, then assess whether customers would accept an adjustment.
That process needs to capture more than the supplier’s latest invoice. Delivery, payment processing, materials and the labor needed to complete an order may all affect what is left from a sale.
The US Small Business Administration’s break-even calculator separates fixed costs from variable costs, which change with the volume supplied. Its calculation divides fixed costs by the selling price minus variable cost per unit.
The difference between price and variable cost is the contribution available to cover fixed costs and, beyond that, profit. If that amount shrinks, a business generally needs more sales to cover the same fixed expenses, assuming its other costs and product mix remain unchanged.
For illustration, a product selling for $100 with $60 in variable cost contributes $40 per unit. If variable cost rises to $70 and the selling price stays unchanged, the contribution falls to $30. Covering $12,000 in fixed costs would then require 400 units rather than 300. These are hypothetical figures, not survey results.
A price increase might restore the contribution on each sale while reducing the number of customers willing to buy. Our guide to checking whether a discount pays for itself explains the same calculation when a business considers cutting its price.
Index-linked contracts need a precise reference
An index-linked price changes according to an agreed measure. Instead of reopening the entire negotiation whenever costs move, buyer and seller specify a formula and review dates.
The Bureau of Labor Statistics’ guidance on contract escalation says agreements should identify the base payment and the precise Consumer Price Index series being used. The CPI measures changes in consumer prices; it is not a direct record of every business’s input costs.
The choice of reference affects how the contract behaves. A supplier’s costs may move differently from a broad consumer index. Parties also need to understand the reference period, adjustment frequency and any limits or rounding rules.
A separate surcharge can make a particular cost visible, but the agreement still needs to define what triggers it and when it ends. Otherwise, an apparently clearer pricing structure can become another source of disagreement.
Timing and customer response belong in the same calculation
Different customers may have different order sizes, delivery requirements or service costs. A customer-specific price can reflect those differences. It can also create administrative work: sales teams need to know which quote is current and which terms have already been promised.
Our reporting on international video game pricing describes another form of differentiation, where publishers adjust prices across markets. It offers a separate example of prices reflecting commercial choices beyond a simple currency conversion.
For a supplier reviewing prices more often, the operational requirement is keeping quotations, contracts, invoices and sales staff aligned. An updated price list has little effect on an order already accepted under different terms.
The next review should also examine what happened after the previous adjustment: whether customers reordered, bought less or required additional discounts. A higher list price and a higher amount actually collected are not necessarily the same result.
