During Antitrust Trial, Exec Admits Kroger Jacked Up Milk and Egg Prices Above Inflation

[libertybele]

During Antitrust Trial, Exec Admits Kroger Jacked Up Milk and Egg Prices Above Inflation

A top Kroger executive admitted under questioning from a Federal Trade Commission attorney on Tuesday that the grocery chain raised its egg and milk prices above the rate of inflation, a concession that came as no surprise to economists who have been highlighting corporate price gouging across the U.S. economy in recent years.

Andy Groff, Kroger's senior director for pricing, said during a court hearing on the FTC's legal challenge to the company's proposed acquisition of Albertsons—its primary competitor—that Kroger's objective is to "pass through our inflation to consumers."

Groff's comment came in response to questioning about an internal email he sent to other Kroger executives in March. In that note, Groff observed that "on milk and eggs, retail inflation has been significantly higher than cost inflation."

A Kroger spokesperson told Bloomberg in a statement that the email was "cherry-picked" and "does not reflect Kroger's decadeslong business model to lower prices for customers by reducing its margins."

But Rakeen Mabud, chief economist at the Groundwork Collaborative, noted Wednesday that "execs all over the economy were saying this stuff on their earning calls back in 2021."

"This was not a secret," Mabud added................

Bloombergreported Tuesday that "in Illinois, where Kroger operates the Mariano's chain, company executives create a weekly report on egg prices, comparing prices from Walmart, Meijer Inc., and Albertsons' Jewel-Osco, said Matthew Marx, president of the Kroger division overseeing Mariano's."

"The FTC walked Marx through several of the weekly egg reports from 2022 and 2023," the outlet added. "In May 2022, for example, both Walmart and Meijer dropped egg prices by 14 cents a dozen, but Mariano's opted to keep its pricing the same to match the higher price at Jewel-Osco, Marx said. A year later, in April 2023, as egg prices again soared, Mariano's opted to keep its pricing near Jewel-Osco's even as Walmart was lowering its own."

The U.S. grocery sector—dominated by Kroger, Walmart, and a handful of other major companies—profited hugely during the Covid-19 pandemic as corporate giants exploited supply chain disruptions to aggressively jack up prices................

https://www.commondreams.org/news/kroger-egg-prices

[libertybele]

I wonder what's going to happen to prices if the Kroger/Albertson merger is allowed to go through.

[rustynail]

It pays to shop.

[catfish1957]

Wonder what was in it for him to make such a admission

No competent corporate executive would do anything like this in this day and age of transparency.....   much less admit it.

[Smokin Joe]

I'd bet someone was checking the wholesale prices going up and trying to compensate ahead of the rise.

You see this at the gas station, where the price today reflects what the next load is anticipated to cost. That's why prices go up fast and come down slowly.

For groceries, though, if the price doesn't climb as fast as expected, it leaves wiggle room to use the product as a 'loss leader' to get people into the store. 

[libertybele]

It pays to shop.

Sure it does, BUT that all depends on how many stores are available to shop in.  We have a Publix, Walmart, Farmer Joe's (a large farm type store) and Target around here to shop at.  Aldi is a joke. I went in there the other day just because I'd never shopped at one of their stores. How do people do their weekly shopping when the selection is pretty meager? No canned goods to speak of. Select vegs and hardly any fruit. Only a few types of meat and the rest of the store had cheap t-shirts and basically just junk.  I walked the store in about 5 minutes and was out the door.

Whole Foods is across the bridge and I think a Trader Joes.  I was in to both of those years ago and at that time they were over priced. 

[catfish1957]

Sure it does, BUT that all depends on how many stores are available to shop in.  We have a Publix, Walmart, Farmer Joe's (a large farm type store) and Target around here to shop at.  Aldi is a joke. I went in there the other day just because I'd never shopped at one of their stores. How do people do their weekly shopping when the selection is pretty meager? No canned goods to speak of. Select vegs and hardly any fruit. Only a few types of meat and the rest of the store had cheap t-shirts and basically just junk.  I walked the store in about 5 minutes and was out the door.

Whole Foods is across the bridge and I think a Trader Joes.  I was in to both of those years ago and at that time they were over priced.

Good observation on Aldi's.  As an average normal male, the idea of shopping 2-3 places for one list doesn't appeal to me.

[berdie]

I haven't been in area that had a Krogers in well over 30 years. But even back then, Kroger was higher priced than any other store. So I believe this story.

[roamer_1]

I haven't been in area that had a Krogers in well over 30 years. But even back then, Kroger was higher priced than any other store. So I believe this story.

Here the Smith's (Kroger) is the cheapest in town, by a lot. eggs around 3 bucks a dozen, milk around 3 bucks a gallon, and 80/20 burger under 4 bucks a pound. Ain't paid no mind, but just this time around I saw the burger go up to 6 bucks