Did grocery chains take advantage of COVID shortages to raise prices? FTC says yes in new report
https://www.usatoday.com/story/money/2024/03/21/ftc-report-grocery-chains-gouge/73059901007/Open linkView original on lemmy.worldSyndicated from the fediverse. Read and engage on the original instance.
View original on lemmy.worldhttps://www.usatoday.com/story/money/2024/03/21/ftc-report-grocery-chains-gouge/73059901007/Open linkView original on lemmy.world
67 replies
-Milton Friedman
Obviously yes. Their production costs barely rose but their prices skyrocketed. Here's a Forbes article from 2022 pointing out that it was increased profit margins causing most of the inflation:
https://www.forbes.com/sites/errolschweizer/2022/09/12/how-profit-inflation-made-your-groceries-so-damn-expensive/?sh=1608bd462eb9
yeah, its not like 90% of the chickens in the country died, so there was no reason for eggs to go from 2 bucks a dozen to 12 bucks a dozen but pure corporate exploitation and greed.
This is just capitalism working as intended. The fact that these price increases are being sold as some kind of abnormality is some real neolib brain in action. It isn't "greedflation," it's literally the same capitalism we've lived with for centuries.
You're both absolutely right and very wrong: it by definition IS greedflation, inflated prices due to greed.
While it is indeed caused by the same capitalist system we've lived with for centuries, it's getting much worse than it has been now that the billionaires and their corporations have realized that there's no consequences even when their profiteering is so blatant that even the likes of Forbes and WSJ are having to acknowledge what they've been able to distract from before.
There is no penalties for collision. Regulation should prevent but since politicians are owned and there's zero effort at enforcment here we are.
There's no such thing as greed in capitalism, though. Rather, greed is the understood foundation from which capitalism is based on. It only works when there is greed. Companies shouldn't avoid raising their prices because they don't want more money, they're supposed to (in capitlism). The system only works when they raise their prices as much as the market will bear.
My grevience with the term "Greedflation" popping up so much recently is that it feels like a cop-out from the current administration to ease economic anxiety without replacing or criticizing the overall economic model. It paints price hikes as a one-time, circumstantial "quirk" of our times, instead of the logical realization of capitalism that it is.
Ive no idea why this is downvoted. This is not a bad take.
I would personally frame it as, greed is a feature of capitalism, not a bug, but ur not wrong either.
When you say "neolib" are you referring the Neoliberal economic philosophy, or some slang term for modern political liberals?
I ask because Neoliberal Economics is all about this profit, and share holders first, type values. This is in contrast to the post Great Depression, Classical Economics philosophy where companies valued employees first, and shareholders last.
Sounds exactly like modern political liberals to me.
Really?
Most Democrat Politicians today certainly are on board. But they were late to buy in. The Republicans actually introduced Neoliberal Economics into politics, chiefly with Ronald Regan.
Today it's mostly the liberal side of the Democratic Party that introduces legislation to curb all the excesses of Neoliberal Economics.
Of course they did. We know they did. All you have to do is go back and read their quarterly earnings calls from 2020 to basically now and they told their shareholders clearly that they were using the pandemic as an excuse to increase profits.
So are they going to have to pay it back or did the FTC make a report for nothing?
... you can't seriously build a system that is meant to take advantage of every situation, praise if for taking advantage of every situation, align it's interests in taking advantage of every situation and then be surprised it took advantage of a situation. We should be better than Pikachu.
It's ethical to steal from these grocery chains.
Isn't that what they call self checkout?
... self-care out.
And yes, we definitely should realize how brainwashed we are to always think of the poor extremely rich people.
And that's why self checkout is no more at the closest grocery store to me.
Why are people acting surprised? That is just the invisible hand of the market. Isn’t this the unfettered capitalism we asked for?
It's the unfettered capitalism Reagan delivered to his cronies, which ofc trickled down to the whole fucking world.
Next: sky is blue
Followed by: water is wet
For now. But soon it will just depend on what brand wants to advertise using the whole of the sky.
Everyone keeps saying this is capitalism and its true. Companies squeezing everyone when they're vulnerable for more profits.
Consumers need protections for things like basic needs so we don't struggle just to survive.
Food and housing should be protected. Luxury brands can get all the profit they want.
Don't touch my fucking groceries and rent!
Are you saying human quality of life is more important than (strictly financial) profits?? I'm thought that is blasphemy and that I must shame you for it. How dare.
This is why giant supermarkets are bad. When you have a choice of several places to buy, they compete.
Rent though has been captured by optimisation software. Your rent goes up because a computer predicted you (or someone else) would pay more.
Is this even news, ofc they did, give them an inch and they always take a mile, war, recessions and sickness are always a profiteering venture for business.
Don't think of your death as failure; think of it as fun! Don't think of Wal-Mart's price hikes as war profiteering, think of them as war... fun!
Nothing happens to Corporations around here. It was pretty clear it was greed even before the data hit.
Enshittification in a nutshell.
Split them up. We did it to the phone companies
You fucking bet and it sure as hell isn't limited to grocery stores.
I love all the headlines that declare [report about thing you already figured out years ago] was in fact true, like it's a fucking surprise. Some would say it's good to have corroborating data, but it never seems to help and I'm just exhausted being right so dammed often.
It's fair, though. They raised the salaries of the people who worked there.
Right?
They did at least where i worked but 3 years into covid and its was only a temporary bonus
The exhalation proves the roost. Or something like that
Fuck you talking about? They haven’t come down!
edit: actually I thought you were replying to the folks who were talking about inflation, but now I'm not sure what you're replying to, so maybe disregard the rest of this comment
Inflation dropping just refers to the rate at which prices increase slowing down, not prices themselves going down. Unless regional and federal governments do something, lowered inflation only means relative stability at current price levels.
I was talking to the writers of the article.
Okay? Now fucking do something about it.
Of course, but they didn't lower the prices after. Fucking awful evil companies.
I’m sure this will result in swift, appropriate actions to hold them accountable. Just let me start holding my breath
Is it normal for you be turning purple when holding your breath?
I think the FTC is the only one surprised about this. I bet they're getting their most severe finger wagging ready to go.
We need experts to explain and study what ordinary people fucking experience first hand
Anyone got a link to the actual report?
It's in my comment posted further down. https://lemmy.ca/comment/8135463
Shouldn't we blame this on the food monopolies rather than grocery stores?
Plenty of blame to go around here.
They both posted record profits.
Retail chains actually have a lot of pull over the market, the individual food companies are more beholden to the grocery chains than you might think.
The grocery stores are mostly monopolies too. I am lucky enough to have a couple good small privately owned grocery stores near me. Their prices haven't gone up nearly as much.
Is anyone going to do anything about it? No
We all knew they did.
What stunning observational powers they have over there at the FTC. Too bad they don't have any teeth because the government doesn't fund them even close to adequately.
No way!
Pikachu, I choose you ... to get here and make that face.
Prices were always going to rise, COVID just gave them an excuse to accelerate it in a shorter amount of time. In Capitalism every company with stockholders has to show ever-increasing profits, because it's never enough. Even if you knock it out of the park one year, you're expected to knock it out of the park even further the next year. And so they keep charging as much as they think they can get away with, and it's really not sustainable. We're approaching the limits of it now as everyone is taking so much that the average citizen doesn't have much more to give.
Duh!
Has been in the news for months. Welcome to last week USAtoday.
You expect prices to decrease when demand increases? I would expect the FTC to have taken an economics 101 class.
I was hoping for a little better reporting in this story, like why does "the FTC report suggest the grocery companies were also price-gouging consumers", but this turd is to be expected from a Gannett-owned organization.
Here's the report.
https://www.ftc.gov/reports/feeding-america-time-crisis-ftc-staff-report-united-states-grocery-supply-chain-covid-19-pandemic
And here's the why ...
I appreciate the link to the report.
This just further enforces my belief that the FTC doesn't know much about economics. When there's a high demand and limited supply, prices increase. The increase in retail costs, inflation, is used to limit consumer demand. Of course their profits are going to increase; that's how economics works. There's nothing in this report that seems inappropriate.
I think they'd have better luck attacking the CEOs who are pocketing increasingly inflated salaries and bonuses.
This comment just enforces the belief that you don't understand the economy. A temporary small bump in cost during covid due to supply chain issues would be a supply and demand issue but if you've noticed, the bump was not small and it has continued ever since.
You don't get to make record profits and then blame prices on the pandemic. If it was solely due to natural inflation, profits would be similar to past years.
The prices inflated due to the supply shortage during Covid have returned to normal levels. The grocery items which are seeing inflated prices today are due to a number of reasons, mostly due to climate change and animal illness. Every company operates in a manner as to increase profits. The pandemic forced businesses to eliminate jobs while increasing efficiency. So, profits are naturally going to increase.
You must be living in a different planet... Prices have absolutely not gone back to normal
They absolutely have gone back to normal. Here's what most people fail to realize.
The costs for goods were already increasing over the years leading up to the pandemic.
The overnight mass adoption of credit cards and POS subscription services forced small businesses to increase prices by at least 3%.
Families and businesses were doing very well during the pandemic thanks to government subsidies - these subsidies no longer exist.
Livestock illness like bird flu and hoof and mouth are becoming much more common causing a shortage of things like eggs. This leads to increased costs for a dozen eggs plus all the crap we buy that contain eggs.
Climate change is forcing a significant number of farmers to adopt new practices and bring in new crops, if they can survive at all.
The beef industry is just about as corrupt as FIFA.
During the pandemic, there was a push to increase salaries for essential workers. This includes everyone from nurses to dishwashers. We also saw an increase in unions which cause costs to rise for businesses.
I mean, I could go on but the point is that everything has been fucked because of a two year+ global pandemic. Our world has changed. This is the new normal.
Are corporations pocketing more profits? Sure. Are they doing it because of "greed"? I'd like to see an actual congressional investigation to find this out. Yes, of course pharmaceutical companies are gonna pharmaceutical. Of course Wall Street drives corporate planning.
Walking around with the presumption that corporate greed is impacting your grocery bill every week is a little futile. Corporate greed has always existed; okay - maybe a lot more since Regan. But these generalizations without taking a moment to consider the actual economics that impact consumer costs is not going to help us solve the problem.
We need to be concerned about climate change. We need to undo everything Trump did with the EPA. We need to break up the FDA and increase regulations. I mean, as it is today, the FDA is utterly useless and fails to protect anyone but corporations. We need, as a society, to be more concerned about how deregulated capitalism is impacting our environment. We need to voice our opposition to corporate consolidations and get congress to enact stronger regulations.
And we need to vote with our wallets. I understand that a lot of people don't have a choice or feel like they don't have a choice but we need to stop shopping at places like Walmart and Amazon. We need to spend more money at smaller farms and local markets. As we continue not doing so, we're just further empowering these gigantic corporations to take over everything. The more money we spend at Walmart, the more money they have to draft legislation to lobby Congress.
Corporate greed is nothing new. There are added costs in the things we purchase today that didn't exist ten years ago.