“On milk and eggs, retail inflation has been significantly higher than cost inflation” – Kroger Senior Pricing Strategist
“Corporate profiteering was an open secret” – Groundwork’s Dr. Rakeen Mabud
This week, grocery giants Kroger and Albertsons are in court working to defend their potential merger after the Federal Trade Commission moved to block it.
Company executives have admitted that they hiked prices more than the inflation they faced. One top pricing executive at Kroger wrote in an email, “On milk and eggs, retail inflation has been significantly higher than cost inflation.” It’s clear: They used inflation to hike prices and supercharge their profits. Read more about the revelations in Bloomberg.
Groundwork Collaborative’s Chief Economist Dr. Rakeen Mabud released the following statement in reaction to the revelations:
“Executives across the economy were bragging on earnings calls about their ability to hike prices on their customers as far back as 2021. Corporate profiteering was an open secret.
“Allowing Kroger and Albertsons to merge will create a grocery behemoth that will continue to profiteer off families just trying to get by.”
Background:
Kroger has been brazen about their success during our inflation crisis. Their CFO told investors on an earnings call, “We’ve been very comfortable with our ability to pass on the increases that we’ve seen at this point. And we would expect that to continue to be the case.” And their CEO infamously declared, “A little bit of inflation is always good in our business.”
Kroger made record earnings during the pandemic and those earnings went back to Wall Street in the form of $1 billion in stock buybacks and a $147 million dividend program.
Earlier this year, Groundwork released a report that found families are now paying 25 percent more for groceries than they were prior to the pandemic, compared to 19 percent overall inflation. Groundwork’s Clara Wilson also dove into the Federal Trade Commission’s block of the Kroger-Albertsons merger and why it’s a crucial move to prevent future spikes in food prices by preventing even more consolidation in the food supply chain.
Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about the Kroger-Albertsons trial and high grocery prices.