These Food Brands Are Actually Raising Prices Higher Than Inflation Rates Call For

[Yo_Mama_Been_Loggin]

If you’ve been grocery shopping lately, you’ve probably noticed markedly higher prices on items like bread, milk, and eggs. It’s been widely reported that inflation has driven up prices, and the Bureau of Labor Statistics’ food index, a measure of price changes in grocery stores and restaurants, increased 11.2% year over year last month.

But a new New York Times report says some food companies may be raising prices higher than inflation calls for—just because they can. “Corporations have used inflation, the pandemic, and supply chain challenges as an excuse to exaggerate their own costs and then nickel-and-dime consumers,” Kyle Herrig, president of watchdog organization Accountable.us, alleged to the Times.

Facing erratic food costs, staffing shortages, and evolving safety regulations in recent years, grocery stores and restaurants saw very real rising costs, which they passed on to their consumers. Now some food companies have been able to cover their inflation-based costs and continue to raise prices. Jason English, an analyst at Goldman Sachs, noted on a call with other analysts this summer that Conagra Brands, owner of brands like Slim Jim and Duncan Hines, has both priced its products above inflation rates and recovered its profit margins. Chipotle has increased prices twice this year, while taking in approximately 13% more revenue year over year. (Conagra and Chipotle did not respond to the Times's request for comment.) Grocery prices across the country have skyrocketed 13% over the past 12 months, according to the Bureau of Labor Statistics, exceeding the national rate of inflation at 8.2% as of September.

Certainly, consumers feeling the squeeze in their wallet are switching to cheaper options where they can. But many people seem to have begrudgingly accepted the price hikes, allowing the companies to continue to make record profits. According to the Times piece, James Quincey, Coca-Cola’s CEO, said on a call with investors that sales were strong, even during these tough financial times. “In the face of these pressures, consumers stayed resilient.” Rick Cardenas, CEO of Darden Restaurants, the company behind Olive Garden and Cheddar, said on a call with analysts, “We are seeing strength with guests in higher income households.”

https://www.bonappetit.com/story/inflation-rate-food-expensive

[KPN]

1. As the groceries shopper in our family, I suspect this actually understates the problem.

Numerous products that we routinely purchase have increased by 35 to 30 percent and some up to 40% since Covid. At the same time, volume/weight per package has declines for some of those products. Over that same time-frame, our income has probably gone up 11 or 12 percent. I can't figure it out -- it definitely seems like something is off. Fortunately, we are financially able to handle the increases though some of our home improvement goals are probably going to have to go on the back burner. I don't have any idea how those less fortunate than us are making it.

[Mr.Bill]

9. I just got back from the grocery store.

While I was there I was thinking that it would be difficult to find any product in the store where the price has not risen more than 8%. Many products have doubled and even tripled in price and I'm not exagerating. I agree with your average figure of 30-40% average increase. One bright spot is beef prices have started to come down but are still about 10-20% above pre-Covid prices.

[BumRushDaShow]

2. In a number of cases

regardless of the global commodities that have been inflated due to disruptions by Russia in Ukraine (like some of the grains), they are now at the point of operating under the cover of "pandemic" and "well inflation or something!!!11!!1111".

[crickets]

3. Maybe somebody needs to start talking about windfall profits taxes

for more than just the oil companies.

[MichMan]

5. Windfall profits are windfall profits regardless of the industry or commodity

The question is exactly how much profit triggers it being a windfall?

10%, 20 %...... ???

[Ritabert]

4. I don't drink soda or eat junk food

...so I save money there. I've been a vegetarian for years so meat isn't an issue. I've also given up most processed food and make stuff from scratch. Fewer chemicals in them. As for Chipotle I don't go there due to overabundance of cilantro which I can't stand. As for Darden restaurants we gave them up when the CEO deliberately kept workers below 32 hours so they didn't qualify for health insurance.

[MichMan]

6. Are people under the impression that 8.7% inflation rate should be evenly distributed?

It is an average inflation rate based on specific items defined by the government. Some consumer commodities faced lower increases in raw materials and labor costs, while others had higher costs.

Just because prices exceeded 8.7% increases n some instances, isn't proof that those companies took advantage and gouged people.

The OP appears to suggest that every price should go up exactly 8.7% or something nefarious must be going on.

[EX500rider]

8. Now, now, no logic please, jump on the outrage train! lol nt

[crickets]

10. Well, here's an example of a ridiculous price increase.

Is it really 53% more expensive this year to produce a Twix candy bar than it was last year, even if sugar has been in shorter supply? No.

https://thehill.com/homenews/nexstar_media_wire/3709841-candy-is-more-expensive-this-halloween-especially-these-brands-report/

https://www.bloomberg.com/news/articles/2022-10-21/halloween-candy-inflation-surges-with-twix-and-skittles-seeing-biggest-jumps
No paywall: https://archive.ph/Mon38

https://threadreaderapp.com/thread/1583859186294661120.html

Link to tweet

It's not just happening in the candy aisle (and at the meat counter - yikes) at the grocery store.

https://www.cbsnews.com/news/retail-price-gouging-lowes-amazon-target-accountable-us/

Some of the nation's largest retailers have been using soaring inflation rates as an excuse to raise prices and rake in billions of dollars in additional profit, a corporate watchdog group charged on Friday.

Companies such as CVS Health, Kroger and T.J. Maxx parent company TJX appear to have raised their prices unnecessarily in 2020 and 2021 at a time when Americans were dealing with the economic fallout from the coronavirus pandemic, Accountable.US said in a new report. Instead of keeping prices stable for struggling families, corporations have overcharged Americans and prioritized profit, the group claims. [snip]

The new figures comes as companies enjoy their most profitable year since the 1950s. Pre-tax profits last year soared 25% from 2020, far outpacing the increase in consumer prices. The report highlights an ongoing debate about the causes of inflation, with some consumer advocates arguing that corporations are using inflation as a justification for passing on even higher price hikes to consumers.

The article brings receipts, and is well worth reading in full.

Corporations know they're gouging and that the government is onto them. They're out in force to prevent any action being taken to stem their greed.

https://thehill.com/business-a-lobbying/business-lobbying/3717308-corporations-dominated-lobbying-on-anti-price-gouging-bills-analysis/

Corporations and their industry groups spent big to defeat various bills to crack down on price gouging, according to a report from the Groundwork Collaborative and Public Citizen released Thursday.

Corporate interests deployed lobbyists to oppose bills taking aim at prescription drug costs, bank overdraft fees and sky-high gas prices more than 2,600 times since 2020, outnumbering the bills’ supporters 9-to-1, the progressive groups’ report found.

Opponents of those bills spent $751 million on lobbying over that period, compared to $82 million by supporters. [snip]

While economists initially rejected that idea, noting that prices are primarily driven by supply and demand, more economists are pointing to huge profits as a factor now that demand for products has slowed and supply chains have somewhat recovered in recent months.

Maybe people are outraged because they have good reason to be.

[dalton99a]

11. +1

[dalton99a]

7. Cruel rapacious assholes. Some of them are worse than oil companies.