The levers of government are being primed for an escalating crackdown on excessive food price inflation, which the Biden-Harris Administration and its Congressional allies believe is partially a result of over-concentration and lack of competition in the food and grocery supply chain.
With inflation at its highest point in almost 40 years, American families are facing higher prices at the checkout and are making do with leaner meals. Once deemed essential, workers in grocery stores now say they feel expendable, and have been rewarded with only marginal increases in wages they say leave them unable to cover their own rising food costs.
Meanwhile, producers and grocers are exploiting the pandemic to jack up prices more than necessary to pass on increased costs to consumers, Sen. Elizabeth Warren, D-Mass., blasted in a new letter sent to the head of Kroger, the nation’s largest grocery chain, and shared with NBC News.
“Your company, and the other major grocers who reaped the benefits of a turbulent 2020, appear to be passing costs on to consumers to preserve your pandemic gains, and even taking advantage of inflation to add greater burdens,” Warren wrote.
In 2020, supermarkets saw sales increase by 11 percent over the prior year, an average of $63 billion a month, according to the Census Bureau’s monthly Retail Trade report. It’s a trend that has continued into 2021.
But instead of reinvesting record profits to raise wages and improve working conditions, these companies initiated stock buybacks and boosted executive compensation, the letter noted.
In June 2021, Kroger announced a $1 billion stock buyback program, in late 2020 Albertsons a $300 million stock buyback program, and Publix increased quarterly dividends during the first nine months of 2021 by over $70 million.
“Your companies had a choice: They could have retained lower prices for consumers and properly protected and compensated their workers, or granted massive payouts to top executives and investors,” Warren wrote to Rodney McMullen, chairman and CEO of Kroger. “It is disappointing that you chose not to put your customers and workers first.”
Kroger did not immediately respond to an NBC News request for comment.
Supply chain snarls, labor shortages, and surges and shifts in consumer demand have stressed production and distribution channels over the past 18 months, raising costs for producers and retailers. But critics charge they also created an opportunity.
“The real culprits behind rising prices at the checkout line are extractive private actors who have created knife-edge supply chains ill-equipped to handle fluctuations in demand,” said Rakeen Mabud, managing director of policy and chief economist at Groundwork Collaborative, a Washington, D.C.-based progressive think tank. The group has been advocating for policymakers to make use of their tools to intervene, such as…
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