Report: Grocery prices unnecessarily inflated during pandemic
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(Texas News Service) Americans got a bit of a reprieve last month, as food and auto prices dipped for the first time in 90 days.
As Texas households continue to deal with high food costs, the latest report from the Federal Trade Commission showed some major retailers unnecessarily increased prices during the pandemic in 2020 and are still reaping the benefits of inflated prices.
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Angela Huffman, president of the nonprofit Farm Action, said although supply-chain problems have been largely fixed, Amazon, Kroger and Walmart continue to show high profit margins.
"These companies made money over and above their total costs," Huffman pointed out. "It's one thing to raise your prices to cover higher expenses that you're facing, sure, but what these companies did is use the pandemic as an excuse to exploit the American people."
The report found the pandemic exposed bottlenecks up and down the supply chain, as firms struggled to maintain their output and feed the nation. The average Texas household spends about $286 a week on groceries, and a new report from the nonprofit Feeding America showed Texas is one of the most food-insecure states in the nation.
The reports come as pandemic-era food subsidies have expired and many families are struggling to make ends meet. The FTC did not offer recommendations on how to keep companies from raising prices during a crisis or issue any penalties or fines.
Huffman argued the big grocers have become monopolies with too much influence and power.
"This will be kind of the farthest extent of what they could do but go so far as breaking them up," Huffman pointed out. "In years past, they broke up the telephone companies and the railroads and you know that would be the ideal outcome for us, is to take away their excessive power. But other than that, these companies, they can be fined for this kind of price gouging."
The FTC report found retailer profits rose to 6 percent over total costs in 2021, and 7 percent in the first three quarters of 2023, compared to 5.6 percent in 2015.
