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"People Will Be Furious As Kroger
Doubles Or Triples Food Prices"
by Epic Economist
If you noticed that your monthly grocery bills from Kroger have been more expensive than usual, it’s not just you. According to Cheapism blog, some products have gone up by 90% so far, and the company said it will continue to pass on higher costs to consumers through the end of the year. In fact, higher prices may become the new normal for the grocer, retail experts say. In recent months, customers have been reporting price hikes on several items at Kroger stores, for that reason, we decided to analyze what’s truly driving those increases – and what we discovered may come as a shock for many people out there.
A report published by retail and grocery news blog Cheapism compared current prices on 35 Kroger items with prices obtained on the very same products one year ago, and it found that only two items saw price drops, nine items remained unchanged, and the other 24 items had some eye-popping price increases. On Twitter, thousands of Kroger customers have been venting their frustration with the rising prices. One of them asked: “Why are groceries so expensive at Kroger right now ?” To what another responded “Kroger profits are at record highs. Its stock is up 36% in a year. Its CEO got a 45% raise to $22 million. Meanwhile, 75% of its workers are food insecure. 63% can't pay their bills. Many are on food stamps,” he wrote attaching a link to an exposé released earlier this year by The New York Times.
On December 2, Chief Financial Officer Gary Millerchip said Kroger was passing along higher costs to the consumer in several categories, “where it makes sense to do so," he said. The executive also noted that Kroger is paying more to its suppliers due to challenges that have been affecting the whole industry. But while consumers are forced to spend more at its stores, the company keeps recording extraordinary profits. In fact, over the past quarter, Kroger’s net income rose to $566 million just after hiking prices on consumers. Kroger’s Chairman and CEO Rodney McMullen said the company enjoyed “record performance” in the past couple of years. Meanwhile, the grocery chain spent a staggering $2.2 billion on shareholder handouts last year after it previously admitted it was letting customers absorb higher supply costs.
Essentially, Kroger did have to spend more money to ensure supplies, but while they are raising prices under the guise of increasing supplier costs, they’re also adding a little extra on top of that. Believe it or not – Kroger’s and Albertsons’ CEOs have explicitly admitted that they expect to benefit from rising prices.
“Our business operates the best when inflation is higher” Kroger CEO Rodney McMullen said during an earnings call with analysts. “A little bit of inflation is always good in our business.” “Kroger would have its customers believe they marked up prices just to keep up with outside costs – but the half billion in net income last quarter and whopping $2.2 billion worth of shareholder rewards the grocery giant doled out last year alone suggests otherwise,” wrote Kyle Herrig, president of Accountable.US. “The sooner corporations stop using this as an excuse to demand more from consumers while their profits soar, the sooner we’ll see costs stabilize for working families,” he emphasized.
The prices you’re seeing right now at Kroger stores are probably as low as they will ever be. The era of affordable food prices is over, and from now on, we will probably be forced to get used to some painful grocery bills."
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