Biden Targets Grocery Chains Regarding Food Prices

TL/DR –

President Biden is pressuring grocery chains to reduce their food prices, accusing them of maintaining higher profit margins in a time of rapid price growth. Economic research indicates that prices for staples like eggs and milk significantly shapes American’s perceptions of inflation, with these prices having risen 11% in 2022. Despite inflation rates slowing, prices remain high for many families, with the Biden administration believing there is limited action the president can take to reduce grocery prices swiftly.

Biden Pressures Large Grocery Chains to Lower Food Prices

President Biden, facing a decline in approval ratings due to high inflation, is urging major grocery chains to reduce food prices. The President alleges these chains are profiteering excessively and exploiting consumers.

“There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” Biden said in South Carolina. This foreshadows an increased pressure on grocery chains and other companies who’ve retained high profit margins despite rapid price growth.

While inflation is reducing, public uproar at grocery costs is impacting Biden’s approval ratings ahead of the 2024 election. Economic research indicates staples like eggs and milk, which consumers buy frequently, significantly shape their inflation views.

Though the rate of price increase is decelerating, Biden is aware that prices are still too high for many families. Yet, there’s a consensus that there’s little else Biden can do directly to bring grocery prices down quickly.

The Federal Trade Commission is expected to block a merger between Kroger and Albertsons, two large grocery-store chains, as it could reduce competition and potentially increase prices.

However, a Kroger executive welcomes Biden’s focus on grocer profits, asserting the merger would save customers money. The White House Council of Economic Advisers suggests increased profit margins from grocery chains could be contributing to persistent high food prices.

However, the White House analysis hints that increased grocery profit margins only marginally account for the price spikes under Biden’s tenure. Other factors, like consumer demand and supply-chain disruptions and an outbreak of avian flu, play bigger parts in the price hikes.

Biden’s administration has made several efforts to alleviate grocery price pressures, especially on the supply side. These include spending millions to help meatpacking industry expansion and adjusting federal food assistance benefits for inflation.

The FTC is also considering enforcement actions under the nearly 90-year-old Robinson-Patman Act. If successful, this could lower prices at smaller grocers by ensuring equal buying terms with larger retailers.

President Biden’s advisors are examining ways to increase pressure on large chains in the coming weeks and months. The President stated, “Americans, we’re tired of being played for suckers…we’re going to keep these guys — keep on them and get the prices down.”

—
Read More US Political News