FTC to Launch Inquiry Into Higher Grocery Prices

The Federal Trade Commission will launch an inquiry into the recent trend toward higher grocery prices, straining consumers’ pockets and causing them to make hard choices when it comes to feeding their families.

Per an FTC press release, Chair Khan announced that she will “ask the Commission to launch an inquiry into grocery prices to probe the tactics that big grocery chains use to hike prices and extract profits from everyday Americans at the checkout counter.”

Supermarket News shared Khan’s commentary: “Too often, people feel like too much of their paycheck is going toward covering the basics, like meat, bread, or eggs. But it still isn’t clear that Americans are fully getting the competitive, affordable prices they deserve.”

Khan continued, “Grocery prices skyrocketed during the pandemic due largely to the higher costs and supply chain disruptions. But we also know that in the years since, costs have fallen, and supply chains have improved. Many items, though, are still too costly, and many large grocery chains are still raking in enormous profits.”

FTC Chair Lina Khan Calls for Investigation of High Grocery Prices https://t.co/2NZWFsLfzq

— National Law Journal (@TheNLJ) August 1, 2024

The USDA reported that “average annual food-at-home prices were 5.0 percent higher in 2023 than in 2022. Price growth slowed in 2023 compared with 2022 when food-at-home prices rose by 11.4 percent. For a typical dollar spent in 2022 by U.S. consumers on domestically produced food, including grocery store and eating-out purchases, 34.1 cents went to food service establishments such as restaurants and other eating-out places.”

These fluctuating prices hurt consumer’s bottom line, leading to a comment in May 2024 by Senator Elizabeth Warren. She said at a senate hearing, “Grocery prices skyrocketed during the pandemic, and in many cases, they’ve kept going up, even though the pandemic is over,” reported CNBC. “Grocery prices are up because of good old-fashioned corporate price gouging. And they can gouge consumers on prices because only a few companies control every level of the food chain.”

To try and ease the strain, some big-chain retailers are attempting to lower prices for consumers. Target dropped prices on about 5,000 items, including bread, fruit, vegetables, milk, and meat. Aldi reduced prices for the summer on barbecue staples, and Walmart also reduced prices on over 7,000 items in its stores.

Moreover, the FTC also recently launched an investigation into a practice known as “surveillance pricing,” that uses artificial intelligence to adjust pricing based on a consumer’s data.