some time in July 2024 As price-gouging practices backfired, to win back customers, retailers (McD, Target, Ikea, Aldi, etc,) are beginning to offer discounts/value deals week 3 in Aug 2024, Dem presidential candidate Kamala Harris proposed a price-gouging ban immediate response from right-wing media would have people to believe that she is a communist. retail lobbying group's spin was Harris' proposed ban is a solution in search of a problem yesterday, 27 Aug 2024, while testifying to a Federal Trade Commission attorney, in a anti-trust case, Kroger's Senior Director for Pricing Andy Groff said the grocery giant had raised prices for eggs and milk beyond inflation levels. Groff said Kroger intends to "pass through our inflation to consumers," after an internal email from the executive showed that the price of eggs and milk routinely surpassed what inflation would require for the chain to still make profits. "On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff said in the internal email to other Kroger executives.
I think the 'price gouging' accusations on groceries, etc are bs. When there is market uncertainty, retailers get more cautious on price formation, which weakens the competitive pressure pushing margins down. When the uncertainty subsides, the competitive pressure goes up and margins and prices are forced down. Gouging is when a seller knows that the buyer is handicapped from going to any alternative, but for a dozen eggs customers have been able to turn to many other sellers this whole time. It's just that prices were high across the board for reasons beyond any individual retailer's control. What I do think is price gouging is Uber's business model of changing prices dynamically. Having an algorithm (and many very aggressive lobbyists) seems to have somehow insulated them from criticism. But they drive taxis out of the market with low daytime prices and then jack up rates in times of scarcity.
giant corporations will absolutely price gouge and jack up prices to take advantage of the inflation narrative. And they will flat out tell you they are doing it, but still get people to run interference for them. people love to complain about inflation and costs, but also very obviously want to look the other way if you point out anything other than the 'government' as causes. It's no wonder these corporations are not concerned about being held responsible for their actions and the impact they have on people. And it's no wonder why they support political allies that will make sure to shield them from any responsibility.
A good reason to challenge the model before it spreads. I work for a giant corporation, so maybe that's why. I think of it that I have some insight because I see how it works in my industry. I can also see how it might look like or actually be rationalizing or making excuses for corporate misbehavior. It's probably good that corporations feel the pushback from people on prices, whether that pushback is informed and reasonable or not. It's even good to hear speeches from major politicians. But to have government come in and try to actually regulate your prices based on their fundamental misunderstanding on how the market works is not at all desirable even for the customer who is not a slave to the corporation, imo. They're going to hurt consumers in their attempts to protect them.
this warrants repeating while testifying to a Federal Trade Commission attorney, in a anti-trust case, Kroger's Senior Director for Pricing Andy Groff said the grocery giant had raised prices for eggs and milk beyond inflation levels. Groff said Kroger intends to "pass through our inflation to consumers," after an internal email from the executive showed that the price of eggs and milk routinely surpassed what inflation would require for the chain to still make profits. "On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff said in the internal email to other Kroger executives.
I don't really think so. If they sold only milk and eggs, that might be telling. But, they sell many items and they take different margins on different items to maintain overall profitability (and my understanding, correct me if I'm wrong, is that groceries are a slim-margin industry that requires a lot of scale to have any profitability). So, I don't think it is very remarkable that they raised prices more on these particular items where there might have been softness because their ability to push prices on other products might not have been there. Maybe they took extra on eggs and less on bread, idk. Here's the income statement for Kroger. I'm looking for these windfall profits they took. I see their gross profit has grown at a CAGR of 2.6% from 2021 to 2024 -- a rate that didn't keep up with inflation. Where are they stashing all this egg money?
the income statement doesn't tell you anything about their pricing methodology. the top pricing person at Kroger testifirf in court that they engaged in price-gourging practices.
(Looks like the keyboard on your phone switched from English to Afar. ) Did he? From your article, I find in his internal emails, he wrote: "On milk and eggs, retail inflation has been significantly higher than cost inflation." And what he said in court was: 'Kroger intends to "pass through our inflation to consumers."' I don't see where he says, "Kroger engaged in price-gouging." And maybe I should include a reminder about capitalism, that prices form at the intersection of supply and demand, not as the result of adding a fixed margin to the wholesale price.
from the Newsweek article Groff said Kroger intends to "pass through our inflation to consumers," after an internal email from the executive showed that the price of eggs and milk routinely surpassed what inflation would require for the chain to still make profits. "On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff said in the internal email to other Kroger executives.
People also are looking at the end of the supply chain. Let's say that Kroger didn't gouge on anything and they made exactly the same profit margins they always have. This does not mean the goods they sell have not been artificially inflated throughout the entire supply chain. Kroger does not manufacture food.
why ? when Kroger's top pricing officer (Groff) had already testified in court Groff said Kroger intends to "pass through our inflation to consumers," after an internal email from the executive showed that the price of eggs and milk routinely surpassed what inflation would require for the chain to still make profits. "On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff said in the internal email to other Kroger executives.
I'm not arguing. I am just making the point that Kroger is the end of the supply chain. There is gouging all throughout the supply chain.
