As corporations Inflation to blame for steadily rising prices as the pandemic continues to rock the economy, Sen. Elizabeth Warren (D-Massachusetts) is calling out big grocers for charging customers more while padding executives’ pockets.
Warren sent a letterMonday’s meeting with CEOs of large grocery chains was a chance to express concern about rising prices and to ask if the companies are doing anything to protect consumers, rather than trying to fleece them for increased profits.
Though these companies have reported profits that have increased precipitously in recent months, “it appears that rather than defraying costs for consumers or providing hazard pay to essential frontline workers, these profits have gone directly into the pockets of executives and shareholders,” Warren wrote. These letters were sent to Kroger, Publix, and Albertsons CEOs. All of these companies have reported high profits compared to pre-pandemic levels.
The lawmaker pointed out in her letter that these large grocers appear to enjoy taking advantage of consumers. Experts agree that stores are thriving. purposely raising pricesTo increase profit margins, you should pay more than the cost inflation. “A little bit of inflation is always good in our business,” Kroger CEO Rodney McMullen said in a call with investors in June.
“Although the producer price index released earlier this week did show a rise in wholesale prices, this is clearly not the whole picture,” Warren wrote in her letter. “Behind the scenes, grocery chains have reassured investors that only consumers would be hurt.” She lists a series of questions for the corporations to answer by January 7, asking them to detail price changes for each department, profits made during the pandemic and worker pay policies.
Consumer grocery bills have increased by over 6 percentAccording to Consumer Price Index data, families have been squeezed for as much cash as possible over the past year. struggle with economic hardships. Census Bureau data shows that nearly 20 million Americans live in households that struggle to get enough food as of October.
Kroger earned $2.6 billion in 2020, an increase of 5.6% over 2019, and their adjusted earnings for the third quarter of this fiscal year are up 9.9 percentThe same period was last year. Albertsons tripled its net income2020: $1.89 billion to 2019. Publix increased its net earningsBy 13.9 percent in the third quarter compared to last.
“Large grocers are blaming high food costs on inflation, but it’s time to talk about how they’re using every opportunity to rake in profits, reward executives and big shareholders while driving up prices even more,” Warren saidIn a statement
“These companies made record profits during the pandemic and when faced with the choice to retain lower prices for consumers, and properly protect and compensate their workers, they greedily granted massive payouts to top executives and investors,” she continued. “They need to answer for these actions.”
The disparity in pay between workers and executives has been a problem especially stark at Kroger, where CEO McMullen’s compensation package jumped by over 45 percent to a total of $20.6 million in 2020. McMullen’s $6.4 million increase in compensation meant that Kroger’s average worker salary dropped by 8.1%, with the median pay dropping to more than $2,000.
These same workers were subject to the same conditions. dangerous conditionsas they performed frontline jobs during the pandemic. As the company hailed its grocery workers as “heroes,” it cut hazard pay early in the pandemic while pursuing over $1 billion in stock buybacks in 2020.
Some of the large grocers’ price raises have caused potential legal concerns. Consumers have filed a lawsuit in TexasKroger, Albertsons, among others, were accused of price gouging in the early stages of the pandemic, which nearly tripled the eggs’ price.