Groundwork’s Rakeen Mabud Reacts to New FTC Study: “Bringing down costs at the checkout line requires tackling corporate greed”
March 21, 2024
Groundwork’s Rakeen Mabud Reacts to New FTC Study: “Bringing down costs at the checkout line requires tackling corporate greed”
Today, the Federal Trade Commission released a new study that found large grocery retailers took advantage of supply chain disruptions to raise prices on consumers and squash smaller competitors. Groundwork Collaborative Chief Economist Dr. Rakeen Mabud reacted with the following statement:
“The FTC’s new report adds to the mountain of evidence that powerful corporations, like giant grocery retailers, took advantage of supply chain disruptions during the pandemic to raise prices on consumers and pad their profits.
“Bringing down costs at the checkout line requires tackling corporate greed and anti-competitive practices by raising corporate taxes and disincentivizing excess profit-seeking.”
Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about the role of corporate profits in inflation.
Background
- The FTC found that large grocery retailers used their market power to gain preferential treatment from suppliers over their competitors, while smaller retailers had difficulty navigating disrupted supply chains. Profits also rose for these companies, with food and beverage retailer revenues increased to more than 6% over total costs in 2021, beating their most recent peak in 2015. Even as inflation has fallen, retailer revenue reached 7% over total costs from Q1 to Q3 last year.
- Last month, 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. The report offers policy recommendations to reduce the risk of future grocery price spikes, such as investigating the use of slotting fees that require product manufacturers to “pay to stay” on shelves and scrutinizing anti-competitive mergers throughout the food supply chain.
- In a recent blog post, Groundwork’s Clara Wilson dives 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.
