Amid reporting that Democratic presidential nominee Vice President Kamala Harris will make her debut policy speech targeting price gouging, Fox News personalities are falsely claiming that there’s no evidence that supermarkets engaged in profiteering and criticizing Harris for “bash[ing] businesses.” However, in March, the Federal Trade Commission (FTC) reported that large grocery companies raised their prices higher than their costs, and several other studies have illustrated that such profiteering was a significant driver of inflation.
A March FTC report revealed price gouging by major supermarket chains
On March 21, the FTC released a report on grocery supply chain disruptions during the pandemic, which found that some supermarket corporations “seem to have used rising costs as an opportunity to further raise prices to increase their profits, which remain elevated today.” The FTC report spelled out how large grocery companies raised their prices higher than their costs, leading to increased profits at the expense of consumers:
“As the pandemic illustrated, a major shock to the supply chain can have cascading effects on consumers, including the prices they pay for groceries,” said FTC Chair Lina M. Khan. “The FTC’s report examining U.S. grocery supply chains finds that dominant firms used this moment to come out ahead at the expense of their competitors and the communities they serve.”
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Grocery retailer profits rose & remain elevated: Food and beverage retailer revenues increased to more than 6% over total costs in 2021, higher than their most recent peak in 2015 of 5.6%. In the first three-quarters of 2023, retailer profits rose even more, with revenue reaching 7% over total costs, casting doubt on the assertions of some companies that rising prices at the grocery store are the result of retailers’ own rising costs.
Reporting from early February stated that “The White House Council of Economic Advisers also found in a new report that grocery store profit margins remain higher than their pre-pandemic levels.”
Additionally, a study last year by two progressive think tanks in Britain, reported in Fortune, found that corporate profits increased at a faster rate than costs did. Another study reported in Fortune, from the American think tank Groundwork Collaborative, found that profits drove 53% of inflation during the second and third quarters of 2023, and more than one-third overall since the start of the COVID-19 pandemic, and caused inflation to be 1 to 3 points higher than otherwise might’ve occurred.
Yet Fox criticized Harris for focusing her upcoming speech on price gouging, claiming that it doesn’t exist
On Fox’s America’s Newsroom, the ever-wrong Fox Business host Larry Kudlow criticized Harris’ upcoming speech, accusing her of “basically going to bash businesses” and claiming “there is no evidence of corporate price gouging.”
Fox & Friends co-host Brian Kilmeade also defended supermarket companies, saying, “If Kamala Harris is going to run on, ‘I prosecuted corporations for price gouging,’” Republicans should defend corporations. Kilmeade continued defending supermarkets that were found by the FTC to engage in price gouging: “Their profit margin is so low. … Supermarkets are having trouble making ends meet. So they’re not the problem.”
