The inflation spike that followed COVID-19 gave many companies cover to push through higher prices due to rising raw materials and wage costs. Investors often welcomed those increases, seeing them as a sign that businesses could protect profits in a difficult environment.
But with inflation now at much more tolerable levels and price rises becoming harder to justify, sentiment is shifting. The companies most likely to thrive from here are those with genuine pricing power – the ability to charge more without driving customers away.
Whether it's a trusted brand, a unique product or deep customer loyalty, these advantages can help separate long-term winners from the rest should the era of easy price increases come to an end.
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Apple
Few companies demonstrate pricing power like Apple.
Its products command premium prices, yet customers continue to line up for the latest devices year after year. That’s because Apple has built a whole ecosystem of products and services that work seamlessly together, which keeps customers coming back.
At the heart of that ecosystem is the iPhone. For many users, it acts as the hub that connects AirPods, Apple Watch, iPad, and a growing range of services, including iCloud, the App Store, and Apple Music.
As customers become more embedded in the ecosystem, switching to a rival platform becomes increasingly inconvenient, which underpins remarkable consumer loyalty. Recent performance has been strong, with revenue and operating profits rising at 17% and 21% respectively in the second quarter.
That loyalty gives Apple significant pricing power, which is currently being tested by soaring memory and storage costs. After initially absorbing much of the pressure, Apple recently announced price hikes of 15-25% across its MacBook and iPad ranges to help offset higher component costs.
Price hikes are also expected for the next iPhone later this year, although increases are likely to be at the lower end of the 15-25% range. While we’re cautiously optimistic that its customer base will remain loyal, any slowdown in iPhone sales could have a knock-on effect on growth within the whole ecosystem.
Apple’s valuation isn’t as attractive as it was earlier in the year, but we still see plenty to like over the long term. The key risk is that recent price increases prove harder for consumers to stomach than the market currently expects.
Coca-Cola
When it comes to having pricing power, it’s hard to look past Coca-Cola. Sold in more than 200 countries, its flagship brand is recognised by billions of consumers worldwide. That familiarity is difficult to replicate, giving Coca-Cola an important advantage when it comes to raising prices.
Its business model strengthens that advantage.
Unlike most beverage manufacturers, Coca-Cola doesn't own most of the bottling plants that produce and distribute its drinks. Instead, it supplies concentrates and syrups to a global network of bottling partners, which handle much of the manufacturing and distribution.
This asset-light structure supports industry-leading profit margins, and leaves Coca-Cola less exposed to some input cost pressures than many of its peers. The savings generated by this model can then be reinvested into marketing, helping Coca-Cola maintain the strength of its brands and reinforcing customer loyalty. The result is a business that has repeatedly demonstrated an ability to increase prices without causing a significant drop in demand.
And recent numbers back that up. Over the past five calendar years, Coca-Cola’s average selling prices have risen by about 50%. A further 2% price increase over the first quarter of 2026 did little to quench customers’ thirst for its drinks, with volumes racing 8% higher, helping revenue grow 10% to $12.5bn.
There’s an ongoing tax dispute with US authorities, with a potential $18bn payment on the line. However, Coca-Cola’s balance sheet is strong enough to absorb any negative outcome, and we don’t think it detracts from the long-term investment case.
Coca-Cola’s combination of brand strength and efficient business model mean we think it can continue to grow faster than its peers. That’s reflected in a valuation at the top of its peer group, although we still see some upside. But it also means that any missteps are likely to be punished harshly.
RELX
Unlike Apple and Coca-Cola, RELX isn’t a household name.
The group provides proprietary data, analytics and workflow tools to customers across insurance, legal, scientific and regulatory markets. These services are deeply embedded in day-to-day operations, making them difficult to replace and giving RELX significant pricing power.
Much of RELX's appeal comes from the essential nature of its products. An insurer assessing risk, lawyers conducting legal research, or banks performing mandatory checks on new customers can't simply switch providers overnight. The costs and disruption of switching reduces customers’ price sensitivity.
The business has spent decades building proprietary datasets that are difficult for competitors to replicate. In many cases, customers aren't just buying information. They're buying the tools, analytics and workflow software built on top of it. This helps keep retention rates high and strengthens RELX’s competitive position.
Recurring revenue is another important advantage. More than half of group sales come from subscription-based contracts, providing predictable cash flows and good visibility over future earnings. That stability allows management to invest consistently in new products, artificial intelligence (AI) capabilities and further data enrichment.
RELX’s valuation has come under pressure over the past year amid fears that advances in AI could disrupt parts of its business, particularly Legal. While these concerns are worth monitoring, we think the market may be underestimating RELX’s ability to incorporate AI into its own products.
Recent trading has been encouraging, with all four of its divisions delivering strong underlying revenue growth and management reiterating full-year guidance.
Overall, we think proprietary data, high switching costs and exposure to regulated end markets give it a durable competitive advantage. The valuation looks attractive to us, but the key risk is that emerging AI-driven competitors erode some of that advantage quicker than expected.
The author holds shares in RELX.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss. Yields are variable and not guaranteed.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.