American Action Forum President Doug Holtz-Eakin recently weighed in on the concerning trend of fast-food prices outpacing wages, as well as the Federal Reserve’s trajectory for controlling inflation. This comes as federal officials are investigating the discrepancy between easing prices for grocery chains and the lack of affordable food for American families.
Federal Trade Commission (FTC) Chair Lina Khan has expressed her intention to probe the tactics that big grocery chains are using to hike prices and extract profits from everyday Americans at the checkout counter. This announcement was made during the FTC and the Department of Justice’s first virtual public meeting of the Strike Force on Unfair and Illegal Pricing, which was established to address illegal corporate behavior that negatively impacts American families.
While inflation for grocery items has averaged zero so far this year, popular items like cereal, pasta, and potatoes have seen a decrease in prices compared to last year. However, grocery costs are still up more than 21% from the start of 2021, according to calculations by FOX Business. Despite the slowing pace of price increases, food prices have remained high, according to government data.
The United States Department of Agriculture (USDA) attributes the rise in prices between 2020 and 2021 to shifting consumption patterns and COVID-related supply chain disruptions. In 2022, prices have increased at their fastest pace since 1979, driven in part by the avian influenza outbreak and the conflict in Ukraine, along with other economy-wide inflationary pressures such as high energy costs.
Chair Khan emphasized that while grocery prices skyrocketed during the pandemic due to higher costs and supply chain disruptions, costs have since fallen and supply chains have improved. However, many items remain too costly, allowing large grocery chains to profit significantly. She stressed the importance of ensuring that Americans have access to competitive and affordable prices for basic necessities.
The FTC is committed to using all available tools to crack down on any underhanded tactics that companies may be using to raise prices on essential goods. This effort is aimed at protecting consumers from economic coercion and ensuring fair competition in the marketplace. While specific companies were not named, major players in the grocery sector include Walmart, Amazon-owned Whole Foods, Kroger, and Albertsons.
In response to these developments, FOX Business reached out to Walmart, Whole Foods, Kroger, and Albertsons for comment. The ongoing investigation and efforts to address unfair pricing practices in the grocery industry highlight the importance of ensuring that American families have access to affordable and competitive prices for essential goods.