Pricing Strategy 2027: Why This Year's Price Round Needs More Structure

The starting point: two signals that do not match

In November, many industrial and trading companies decide which prices they will take into the new year. This year, two signals point in different directions. According to preliminary figures from the German Federal Statistical Office (Destatis), the inflation rate in Germany was 2.8 percent in October 2026, down from 3.3 percent in September. Excluding food and energy, it was only 2.1 percent. At the same time, companies themselves report noticeably more price pressure: the ifo price expectations index rose from 23.0 to 25.9 points in October, and in manufacturing from 22.0 to 27.2 points.

A pricing strategy for 2027 that follows the inflation rate alone will aim too low. Passing on your own cost increases across the board will be too blunt. The 2027 price round therefore calls for more differentiation than in previous years.

What the figures actually say

Cost pressure is concentrated in energy and intermediate goods. German producer prices for industrial products were 6.7 percent higher in September 2026 than a year earlier, the highest rate since March 2023. Energy was 14.9 percent more expensive, intermediate goods 6.4 percent. Excluding energy, producer prices rose by only 3.2 percent.

Consumer prices show the same pattern in a weaker form. In October, energy was 12.2 percent above the previous year, goods overall 3.0 percent and services 2.5 percent. Compared with September, consumer prices even fell slightly by 0.2 percent.

The ifo Institute attributes the latest rise in price expectations to crude oil and natural gas prices, which reached their highest level since 2022 in the second half of October. In ifo's view, producer and consumer prices will continue to rise in the coming months. The spread between sectors is striking: price expectations fell among business services, remained almost unchanged in construction and rose sharply in manufacturing.

For pricing strategy, this means that cost pressure is real, but it is unevenly distributed and largely tied to a volatile factor.

Why a flat increase is risky now

A uniform increase across all products and customers is easy to communicate. In the current situation, however, it has three weaknesses.

First, it hits products with a low energy share just as hard as energy intensive ones. For some it gives away margin, for others it demands more than can be justified.

Second, it ties the justification to energy prices. If they fall during the year, the increase loses its argument. Customers will then ask for a rollback, including on products whose price was appropriate for entirely different reasons.

Third, it overloads the sales team. A single percentage for everyone invites negotiation about exactly that percentage instead of about the value delivered.

Five building blocks of a differentiated 2027 price round

1. Measure cost exposure by product group. Before discussing percentages, establish how strongly energy, materials and labour feed into the production cost of each product group. Only this breakdown shows where cost increases actually land.

2. Separate the base price from the energy component. Where the energy share is high, a transparent surcharge or a price adjustment clause linked to a clear index is often more robust than raising the list price. Such a clause works in both directions, which makes it fairer and easier to defend. The base price remains the place where value and positioning are negotiated.

3. Differentiate by customer value and competitive position. Not every customer reacts the same way. Where your product is hard to replace or creates measurable benefit, there is more room than for interchangeable standard items. The price round should reflect these differences rather than blur them.

4. Equip sales with target prices and floors. An increase is created on paper, but it is realised in the conversation. Sales needs a target price and a floor for each customer group, clear approval rules for exceptions and a rationale that goes beyond costs.

5. Measure the effect, not just the announcement. What matters is what arrives on the invoice after discounts, bonuses and special terms. A price waterfall by customer group shows which part of the announced increase was actually realised and where it leaked away.

An example from practice

For illustration, an anonymised and simplified example. A manufacturer of technical components plans an increase for the coming year. The first idea is a uniform surcharge on the entire price list. An analysis of production costs shows, however, that only about a third of the range is manufactured in a highly energy intensive way. For this group, the company introduces a surcharge linked to a public energy price index, adjusted quarterly. For specialised parts with high customer benefit, the base price is raised moderately and justified with the scope of performance. For standard parts under strong competition, the price remains largely stable, while minimum quantities and terms are reviewed. Sales receives target prices per segment and an approval rule for deviations.

The result is not a single number but a price round that can be justified in every customer conversation.

What this means right now

The October 2026 data give a clear picture for planning:

• The inflation rate of 2.8 percent and the core rate of 2.1 percent are no benchmark for your own price round. They describe the consumer basket, not the cost structure of an industrial company.
• Producer prices and ifo price expectations show that cost pressure in manufacturing and intermediate goods persists. Many suppliers will adjust their prices at the turn of the year. Companies that only react once their own purchase prices have risen lose time.
• Because a large part of the pressure comes from oil and gas, price adjustments should be designed to hold even if energy prices fall. This argues for separating the base price from the energy component.
• Destatis will publish the final inflation figures for October on 11 November 2026. Companies that prepare their price round by then can check their assumptions once more before communicating with customers.

Conclusion

The 2027 price round is less a question of the right percentage than of the right structure. Companies that measure cost exposure, separate base price and energy component, differentiate by customer value and prepare their sales teams enter the new year with a pricing strategy that holds even when the cost situation turns. Pricing is not a one-off project but a discipline that improves a little every year.

If you would like to set up your 2027 price round in a structured way, talk to us. Together we look at your cost structure, your customer segments and your process.