General Mills Raising Cereal Prices

General Mills Corp., the nation’s second-largest cereal maker, said it is raising prices an average of 2.6%, after having cut prices four times since 1993. The maker of Cheerios, Lucky Charms and many other brands said the price increases, effective immediately, are intended to adjust for inflation. A General Mills spokesman said he thinks the increase is the first by a major cereal company since competitor Post Cereal, a division of Philip Morris Cos.’ Kraft Foods unit, shook up the $9-billion ready-to-eat-cereal industry by cutting prices 20%. General Mills, Quaker Oats Co. and leader Kellogg Co. followed that move to some extent. Analysts have said the cuts failed to bring more consumers into the cereal aisles. Minneapolis-based General Mills said the new prices are still lower than they were four years ago. General Mills stock edged up 12.5 cents to close at $65.75 on the NYSE.