Wonder why grocery prices are still high? So does the US government
Are consumers getting ripped off at the grocery store? The FTC says it's determined to find out.
(NewsNation) — Federal Trade Commission Chair Lina Khan is pushing for an investigation to determine whether consumers are getting ripped off at the supermarket.
"We want to make sure that major businesses are not exploiting their power to inflate prices for American families at the grocery store," Khan said Thursday at a public meeting with Justice Department officials.
Grocery prices surged more than 25% from 2019 to 2023, faster than inflation for other goods and services. Although food inflation has slowed recently, many families have realized that what goes up doesn't always come down.
Chicken and beef prices, for example, are still near all-time highs, according to the Bureau of Labor Statistics.
Khan acknowledged that grocery inflation has improved over the past year but said it's still not clear that Americans are getting the "competitive, affordable prices that they deserve." She called for an inquiry and said the FTC is determined to understand why many items remain too costly even as many large grocery chains are "still raking in enormous profits."
Once the FTC authorizes the study, major grocery chains would be ordered to provide information on their costs and prices on common products, Reuters reported.
An FTC report earlier this year found that some large grocery retailers took advantage of pandemic-era supply chain disruptions to beat out smaller rivals. The same report found retailer profits rose in the first three quarters of 2023.
President Joe Biden has called out grocery giants for so-called "shrinkflation," arguing that corporate greed is helping drive inflation. The FTC has played a major role in carrying out the administration's push to combat anti-competitive pricing.
Earlier this year, the FTC also sued to block Kroger's $24.6 billion acquisition of Albertsons, alleging the deal would limit competition and hurt consumers.
Other research has cast doubt on Biden's claim that "greedflation" and "shrinkflation" are rampant. One study from economists at the Federal Reserve Bank of San Francisco found that price markups stayed "essentially flat" across the economy since the recovery.
After surging to 13.5% in August 2022, year-over-year grocery inflation stood at 1.1% in June of 2024.