The price that retailers pay for groceries has been falling for the past few years. So, why does your grocery bill keep going up? That's what regulators hope to find out.
The Federal Trade Commission and its new Strike Force on Unfair and Illegal Pricing are targeting major chains like Walmart, Costco and Target for data on common products.
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During the Strike Force's first meeting, FTC Chair Lina Khan urged the commission to launch an inquiry into grocery prices in order to probe the tactics that big grocery chains use to hike prices and extract profits from everyday Americans at the checkout counter.
How much do retailers pay for groceries and how much do they charge for them? An FTC study released earlier this year found profits for food retailers were rising more than 6% as food prices soared 25% between 2019 and 2023. The report suggested that profits, as opposed to cost increases spurred by inflation, were actually driving up prices.
"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 report concluded. "This profit trend casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers' own rising costs."
The report urged "further inquiry" by policymakers.
When the Strike Force on Unfair and Illegal Pricing was announced in March, the White House said it would "strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices," focusing on key sectors such as prescription drugs and health care, food and grocery, housing, financial services, and more.
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