Kroger admitted to raising prices on essential items more than necessary to keep pace with inflation during a court hearing.
The supermarket chain’s top pricing executive testified before a judge Tuesday that the store raised prices on milk and eggs more than required.
“For milk and eggs, retail inflation has been significantly higher than cost inflation,” executive Andy Groff wrote in an email to his bosses in March.
Groff was forced to testify about his email as part of an ongoing antitrust lawsuit filed by the Federal Trade Commission in an attempt to stop Kroger from buying rival chain Albertsons.
The FTC and several states argue that the planned $24.6 billion acquisition would eliminate competition, which in turn would remove control over prices.
“Greed is real,” one Kroger shopper wrote on X in response to Groff’s admission.
Kroger admitted to raising the price of essential items more than necessary to keep pace with inflation during a court hearing
“I’ve noticed prices are higher than any other store (except Kroger), now we know why,” another commented.
Others said they would boycott the store because of unnecessary price increases.
“It’s absolutely disgusting,” wrote one X user, “I’ve never been to a Kroger and now no matter where I end up in life, I never will.”
Retail experts, however, were not surprised by the admission.
“This is not at all surprising,” said Drew Powers, founder of Illinois-based Powers Financial Group. Week of news.
‘Companies across multiple industries have been posting record profits since the Covid-19 pandemic hit, while consumers have faced the highest inflation in recent history.
“The math can only indicate that businesses have raised prices above the general level of inflation. As the old saying goes: ‘Never waste a good crisis.'”
Kroger has argued that its planned acquisition of Albertsons would actually lead to lower food prices because it would allow them to compete with conglomerates like Amazon and Walmart.
The company’s goal is to “pass on our inflation to consumers,” Groff said in response to questions about his email.
“This selected email covers a specific time period and does not reflect Kroger’s decades-long business model of lowering prices for customers by reducing its margins,” a Kroger spokesperson said.
The supermarket chain’s top pricing executive testified before a judge on Tuesday that the store raised prices on milk and eggs more than required (Pictured: Cartons of eggs for sale at a Kroger store in Houston, Texas)
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“What is missing is the fact that Kroger’s retail prices include the cost of operating a grocery store, including labor, transportation, advertising and other costs,” the statement said.
‘Many of these costs have increased significantly since 2020. Kroger’s pricing decisions are affected by factors beyond inflation.
The chain says it is trying to be competitive in “everyday essentials” such as milk, eggs, sugar, bananas and iceberg lettuce.
The company compares prices for those items with rivals such as Walmart and Aldi every week, he said.
‘Reducing margins to lower prices over time so that more customers shop with us is our business strategy and the strategy we will implement at Albertsons after our merger.’
The incident comes after Vice President Kamala Harris outlined plans to introduce a federal ban on price gouging in the food industry if she wins the presidential election in November.
Price gouging occurs when retailers drastically increase the price of essential goods, usually to take advantage of an adverse situation such as the Covid-19 pandemic.
Kroger is also under investigation for using electronic price tags on store shelves across the country.
US Senators Elizabeth Warren and Bob Casey announced they were investigating the practice to see if the chain was engaging in dynamic pricing.
In a letter to Kroger CEO Rodney McMullen earlier this month, the senators expressed concern that the technology could be used to scam customers and raise food prices during peak shopping hours.