President Biden’s administration has taken aim at grocery chains, sending out election-year proposals to lower prices on products ranging from milk to eggs to bread.
“Our message is very clear, and the president will continue to lean into it. So if you’re a company that’s seeing input prices go down and you’re not passing those savings on to consumers; ‘You’re out,”’ Jared Bernstein, chairman of the Biden Council of Economic Advisers, said in a virtual conference with reporters.
“We’re seeing (profit) margins rising, particularly in the grocery sector, where we’re noting the need to increase pass-through (to consumers).”
Bernstein did not name specific companies.
Grocery giants Walmart, Kroger and Albertsons are posting gross profit margins of more than 20%, about the same as they were before the coronavirus pandemic sent inflation soaring.
A White House analysis of Census data shows food and beverage retailers’ revenue as a percentage of costs rose sharply from before the pandemic to levels not seen since the mid-2000s, a metric says it tracks retail performance more directly. -UPS.
“We still have too many companies in America ripping people off, whether it’s price gouging, junk fees, greed flation, shrinkflation,” Biden said last week.
Mr. Biden has pushed drug companies to lower the cost of insulin, hotel chains to lower fees, and sought to diversify the meat-packing industry as beef prices soared in the wake of the pandemic.
Biden’s pitch for lower supermarket prices comes ahead of the Democrat’s re-election bid in November. A flurry of positive economic data, including Friday’s blockbuster jobs and wage numbers, have not translated into strong approval ratings for Mr. Biden, who says voters remain concerned about high costs.
Bernstein said consumer confidence is improving, citing a University of Michigan consumer survey that showed sentiment has risen to its highest level since July 2021, and said that recent U.S. stocks He also mentioned the steady trend in the market.
“As inflation continues to ease, the job market tightens, and real wages and wage growth continue to outpace inflation, that will start to show up as an improvement in confidence,” he said.
Bernstein cited eggs, milk, electronics, airfare, used cars and gasoline as particularly sensitive areas for Americans. We are also working on actual cost reductions.”
Bernstein said that although eggs make up just 0.1% of the consumer price index, “eggs are much bigger in the national psyche, and we’re very aware of that.” .
The United Nations Food Agency’s world price index fell to its lowest level in nearly three years in January due to declines in grain and meat prices.
Kroger and Albertsons are expected to complete a planned $24.6 billion merger later this year, pending antitrust review amid concerns that the deal will increase prices.
“We agree with President Biden,” a Kroger spokesperson said. “Too many grocery stores in America are increasing profits as opposed to Kroger.”
The spokesperson added that the merger “will deliver at least $500 million in additional price investments in Albertsons stores, lowering prices for even more U.S. consumers.”
A spokesperson for the National Grocers Association, which represents independent grocers, called for stricter antitrust enforcement, saying, “The nation’s largest retailers are forcing food suppliers to pay higher prices to smaller competitors.” “We are using our power to offset higher production costs by charging more.”
