Supermarkets profited off pandemic and supply chain problems, FTC says

[BumRushDaShow]

Source: Scripps News

Posted: 12:10 p.m. EDT Mar 25, 2024


As the pandemic wore on and supply chains started to become more strained, the nation's largest grocery store chains raised prices and became more profitable, a new report from the Federal Trade Commission suggests.

The FTC says that profits surged at the United States' largest chains even though Americans were dealing with soaring food costs and fewer choices. The FTC's report says the supermarket chains "used rising costs as an opportunity to further raise prices to increase their profits, which remain elevated today."

“As the pandemic illustrated, a major shock to the supply chain can have cascading effects on consumers, including the prices they pay for groceries,” said FTC Chair Lina M. Khan. “The FTC’s report examining U.S. grocery supply chains finds that dominant firms used this moment to come out ahead at the expense of their competitors and the communities they serve.”

The FTC noted that revenues increased to more than 6% over total costs in 2021 for major grocery chains. According to the consumer price index, food purchased for in-home consumption increased 7.4% in 2021. Food prices jumped again by 11% in 2022. From January 2021 through the end of 2022, food prices rose over 19.4%.

Read more: https://scrippsnews.com/stories/supermarkets-profited-off-pandemic-and-supply-chain-problems-ftc-says/

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Link to FTC REPORT (PDF) - https://www.ftc.gov/system/files/ftc_gov/pdf/p162318supplychainreport2024.pdf

[bucolic_frolic]

1. Don't like to say this

but those double SNAP payments were a signal to food retailers that they could raise prices and demand would not slacken.

[Leghorn21]

10. Excellent point, bucolic!!

My monthly SNAP payments went from $50 or so to TWO HUNDRED — after a few months I just went off it, I don’t need all that (it’s just me here)…but yeah, that was surely a nice windfall for the grocers of America $$$

[Lemon Lyman]

16. Wow!

$50/month for food & supplies? How in TF are you supposed to survive on that??

[Leghorn21]

20. Well, it's a sliding scale thing, so if you're single and making a little money (in my case, SS!), you'll get some help

and if you seriously have no income, you’d certainly get more -

Also, SNAP is strictly for food (ie, no “supplies” other than food) -

[Orrex]

2. Well I for one am shocked, just shocked.

When times are bad, prices go up and stay up.

When times are good, prices stay up and continue to go up.

But wages? Hell, we can't raise those, or else we might damage the economy!

[peppertree]

12. The Argentina economic school, if you will

And administrations that in any way try to rein in price gouging, and/or prop up wages?

"Communists! CIA - com' help!!" (unexpected and massive drought ensues)

[onecaliberal]

22. The peolle who will stand up to them must be voted into office.

It’s our only hope.

[RANDYWILDMAN]

27. can this be an OP

and can we get some people who matter to talk about this more often.

[2naSalit]

35. Ah yes...

The "joys" of capitalism.

[sakabatou]

3. *pretends to be shocked.gif*

[SWBTATTReg]

4. Not surprised. That's why I wish we went back to more regressive taxes, so that those that profit

inordinately would at least pay a price, tax-wise, for gouging. Instead, I see where companies that are profiting immensely at the expense of the rest of us, are rebating excess profits to their shareholders. Don't the rest of us, enabling a robust economy during these trying times deserve a break too?

[happybird]

5. No shit, FTC

and prices won’t go back down any time soon, if ever.

[BumRushDaShow]

6. I've noticed in the past year

if they get shamed loudly in the media, they will start dropping prices. How long that lasts is another thing altogether...

[TexasBushwhacker]

7. I spend the same

I just look at the ads online and stock up on sales.

[BumRushDaShow]

9. My supermarket has "rewards" points that add up and can be exchanged

for a free item (or items depending on how many points are redeemed) from a variety of products (although mostly their store brand).

I also do the digital coupon clipping too! Definitely makes a difference.

[SergeStorms]

15. Wegmans supermarkets....

have been lowering prices, and airing commercials to pat themselves on the back about it. Wegmans is an east-coast chain that originated in Rochester, NY.

Their prices are higher than just about everyone else's to begin with, but I have to say the quality of their meat and produce is higher that anyone else's as well.

I grew up with Wegmans as our local neighborhood grocery store. My, how they've grown over the years.

[usonian]

8. Some strong statements and some threats/actions/suits need to happen

So that Joe Biden doesn’t take the blame for these highwaymen and reverse Robin Hoods, bleeding the average person to fatten their bank accounts.

And not just Apple and Google. I’m not eating my phone.

[appalachiablue]

18. ++

[Bengus81]

11. Wow...the FTC is quick on their feet eh??

It's called GREEDflation boys and it has been for years because most people with a brain knew exactly what you at the FTC are now saying. Guess what....food price were rising almost daily in 2020 when Covid took hold but the media and most other RW idiots like to put all the blame on Biden and pretend nothing went up on food until somewhere into 2021. Total BS.........

So...what the HELL are you going to do about it?? Slap the wrist of the CEO of Kroger??

[70sEraVet]

13. Great joke at the end of this article!

The report's release comes as the federal government is fighting a merger between Kroger and Albertson's. The two large chains say the merger will create a more efficient business operation, allowing them to pass savings along to consumers.
https://scrippsnews.com/stories/supermarkets-profited-off-pandemic-and-supply-chain-problems-ftc-says/

[Stargazer99]

28. pass on savings? I got a cheap Brooklyn bridge you can buy

just how dumb do they think we are? Maybe they are right -maybe we are dumb

[dchill]

14. I don't know why they didn't ask me...

I could have told them that in 2020.

Sheesh!

[Trueblue1968]

17. Kroger .... Fred Meyer here in oregon have super high prices

Evil company !!!! CEO makes huge salary, workers are poor.

Price gouging.

[niyad]

19. NSS, FTC. Where have you been the last four years???

[Evolve Dammit]

21. Ya think????????? So f'in obvious. Across all sectors. Not you personally. BRDS..

[twodogsbarking]

23. No fucking duh.

[Aussie105]

24. Rats!

The best of Capitalism as practiced by the chains.
But it is still opportunistic and predatory rat like behavior

Prices here in Australia are still up.

I look at an article on the shelf, look at the price, ask myself . . . Do I really need this?
Back it goes.

[Aussie105]

25. dupe scrubbed

Last edited Tue Mar 26, 2024, 02:23 AM - Edit history (1)

NT

[RANDYWILDMAN]

26. I wish I could just raise my pay by 11%

anytime I felt like I wasn't making enough money

[no_hypocrisy]

29. No argument from me. I was a cashier at a food emporium

all through the Pandemic.

I watched incredulously as customers laid down $200, $300, $400, even $500 per transaction. In our case, they didn't care what the price was; they weren't going hungry during this period of time.

[ProfessorGAC]

30. While A Big Issue...

...let's not forget that the shock to the supply chain was far more severe than necessary for 2 big reasons:
1. The poor response to COVID that then resulted in a panic when the "shock" that it was real hit all at once. Insufficient attention is applied to the misadministration's fumbling of this.
2. The failure of manufacturers & distributors to have a contingency plan. They ran inventories at ridiculous J-I-T levels and when COVID caused an uptick in demand the whole system collapsed.
This whole affair reflects the issue when margins & stock price are the sole focus of far too many large companies.

[BumRushDaShow]

31. Also "single point of failure" sourcing vs distributed

especially when China implemented their "Zero COVID" policy that essentially shut down everything within an area for some indeterminate amount of time.

[ProfessorGAC]

32. Good Point

The thing that galled me most is that, having known people in consumer products company, not one of them was operating close to demonstrated capacity before COVID hit.
The disruption to supply should have taken weeks, not months, to come to balance. But, raw material supply contracts weren't written to allow for emergency uptick. Of course, the inventories at all levels would have to be higher and those trivial incremental costs of carrying inventory would have fut into profits. Heaven forbid there would be 10.1% net income instead of 10.2%

[BumRushDaShow]

34. Well a problem with the supply disruption

was obviously "workers" who were frontline and contracted the virus.... and not just the truckers, but there were huge issues of worker shortages and mismanagement at the west coast ports, apparently due to a lack of willingness of the port owners to run 24/7 like other ports around the world do (probably so they didn't have to pay for that).

[jaxexpat]

33. These facts must be showcased every time the word inflation comes up in the campaign.

It doesn't help that grocery stores are the main place voters get it shoved in their faces. People, voting people, shop these stores regularly and so far, the Republicans have been allowed to make Democrats own their corporate profit increases. But this data can counter a lot of the ill feeling toward the administration. It would be prudent to advertise the chains' ownership and management's political contributions since they're probably ALL Republican supporters.

If the system is rigged, just use their scaffold to hang them.

[BumRushDaShow]

37. +infinity

[Hartpi978]

36. Who gets the money

When people complain about inflation and blame the Biden administration, just ask them, "Who is getting all of the extra money we are paying?" The answer is this is corporate greed. Corporations and businesses lining their pockets (and their stockholders' pockets).

[iluvtennis]

38. Most of us suspected this, but to see actual analyses to back it up is jaw dropping.

I had read previously that most corporations (groceries stores, rental agencies, department stores, etc) all indicated they wanted some of the $2000+ that folks received in Covid stimulus payments.