Kroger and Albertsons have been accused of price gouging—making it harder for families to put food on the table. This merger would be a DISASTER for shoppers and workers alike. This is corporate greed on full display, and it’s hurting Americans! https://t.co/CpB0spgps1
— Senator Jeff Merkley (@SenJeffMerkley) August 28, 2024
Kroger, one of the nation’s largest grocery chains, has admitted to raising prices on certain products beyond inflation levels during an antitrust trial. Andy Groff, Kroger’s Senior Director for Pricing, revealed this information while testifying to a Federal Trade Commission (FTC) attorney. The admission came as part of a court hearing related to Kroger’s FTC antitrust suit, which was filed after the company announced its intention to acquire grocery competitor Albertsons.
Price-gouging hardworking folks simply trying to put food on the table for their families is wrong. Executives who knowingly inflate prices to pad their own profits must be held accountable.https://t.co/0Un2tIf9kw
— Lori Trahan (@RepLoriTrahan) August 29, 2024
Groff stated that Kroger aimed to “pass through our inflation to consumers” and cited internal emails showing that the prices of eggs and milk had consistently exceeded the inflation levels necessary for the company to maintain profitability. Drew Powers, founder of Illinois-based Powers Financial Group, expressed that this revelation is not surprising, as companies across various industries have been posting record profits while consumers have faced the highest inflation in recent history. Powers noted that the math can only point to companies raising prices above the general level of inflation, quoting the old saying, “Never let a good crisis go to waste.”
You don’t say:
"This is not at all surprising…Companies across multiple industries have been posting record profits…The math can only point to companies raising prices above inflation. As the old saying goes, 'Never let a good crisis go to waste.” https://t.co/KYrZWqJUiC— Jeff Berardelli (@WeatherProf) August 29, 2024
Kroger’s spokesperson responded to media inquiries by claiming that Groff’s comments were “cherry-picked” and “do not reflect Kroger’s decades-long business model to lower prices for customers by reducing its margins.” However, economists have long indicated that the grocery sector, dominated by a few major chains like Kroger, benefited from supply chain disruptions during the pandemic, allowing companies to hike prices beyond what was necessary to maintain profits.
This is what corporate greed looks like—lining pockets at the expense of hardworking Arizonans.
I won’t allow corporations to rake in profits while Arizonans suffer.https://t.co/BZcLCjWT0z
— Ruben Gallego (@RubenGallego) August 29, 2024
Kroger’s pricing strategy questioned
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, stated that comments like Groff’s call into question the explanations Americans have been given for the last three years regarding inflation. While supply chain issues, rising shipping costs, and increased wages played a role in higher prices, the admission that some prices were elevated simply because businesses knew they could doesn’t help the case for those arguing that price gouging isn’t an issue.
The FTC antitrust case argues that if Kroger successfully acquires Albertsons, consumers could face even higher price hikes due to reduced competition. Kevin Thompson, a finance expert and founder and CEO of 9i Capital Group, believes Groff’s comments highlight a larger trend in the current economic system, where there is less competition and larger players dominating the market, diminishing consumer choice and competitive dynamics. Michael Ryan, a finance expert and founder of michaelryanmoney.com, warned that Kroger might face significant backlash from consumers who feel ripped off and are quick to jump ship, making it hard to regain their trust once lost.
This issue is likely a broader problem in the grocery sector, and experts suggest that customers could respond quickly with their buying choices.
- Newsweek.”Kroger Executive Admits Company Gouged Prices Above Inflation”.
- Bloomberg.”Kroger Hiked Milk, Egg Prices Above Inflation, Merger Judge Told”.
- Cincinnati.”‘They are all dogs’: Texts by execs could haunt Kroger merger with Albertsons”.