President Joe Biden is pointing the finger at grocery chains for keeping prices high after another hotter-than-expected inflation report.
Following the release of the latest consumer price index (CPI) Thursday, Biden called “on corporations including grocery retailers to use record profits to reduce prices.” Despite the progress that has been made to lower inflation more than 60% from a pandemic-era peak, prices remain too high for everyday essentials like food and housing, the White House said in a statement.
The CPI rose 3.5% for the 12 months ending March — another notch up from the 3.2% year-over-year rise booked in February, the Bureau of Labor Statistics announced Wednesday. Food prices climbed 2.2% annually, while shelter jumped 5.7%.
Meat, fish, poultry, and eggs rose 0.9% for the month, boosted by a 4.6% increase in the price of eggs. Meanwhile, butter declined by 5% and cereal and bakery products fell by 0.9% in March. Fruits and vegetables booked a 2% year-over-year increase.
“Inflation right now is like the stubborn child that refuses to heed the parent’s call to leave the playground (the Fed is the parent in this case),” said Jason Pride, chief of investment strategy & research at wealth management firm Glenmede.
The Federal Trade Commission (FTC) released a new report last month showing that three of the largest grocery retailers in the United States — Kroger, Walmart and Amazon — saw their profits climb more than 6% during the pandemic, and have kept margins elevated in the years that followed.
The agency said its findings “[cast] doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs.”
“Some firms seem to have used rising costs as an opportunity to further hike prices to increase their profits, and profits remain elevated even as supply chain pressures have eased,” the FTC wrote in its report.
Biden is taking a page from the books of other leaders around the globe who have pushed major grocery chains to bring down stubbornly high prices at grocery stores worldwide. Canadian prime minister Justin Trudeau met with executives of the five largest grocery chains, representing roughly 80% of the Canadian market, to present plans on how to stabilize grocery prices. Trudeau said that if the measures were not effective at bringing food costs down, that he would consider alternatives, including imposing new taxes on the chains.
The French government has also held negotiations with grocery retailers and the trade groups that represent them in an attempt to wrangle soaring prices. The British Competition and Markets Authority, its main antitrust watchdog, has similarly said it will ramp up its investigation into grocery prices.