After demanding that the government investigate Big Oil, Big Cars, Big Poultry, and Big Semiconductors for allegedly gouging consumers, Elizabeth Warren now contends that Big Grocery is also conspiring to take advantage:
Giant grocery store chains force high food prices onto American families while rewarding executives & investors with lavish bonuses and stock buybacks. I'm demanding they answer for putting corporate profits over consumers and workers during the pandemic. https://t.co/NvY2MKKJNP
— Elizabeth Warren (@SenWarren) December 20, 2021
It is wild that all these grocery chains, which have been competing — and precipitously dropping prices — for decades, decided to collude at the very moment supply-chain problems hit, inflation spiked to a 30-year high, and Washington’s Covid-19 spending spree was needlessly swamping the economy. It’s even weirder that, according to Warren, virtually every boogeyman industry suddenly engaged in this dastardly behavior at the same time.
Big Grocery is one of the least profitable major businesses in the United States, with average margins coming in at a little over 2 percent. Warren has good reason to believe that voters aren’t aware of this fact. Walmart, for example, averages around 2 percent net profit; however, the public believes it pulls in 36 percent. But to put the numbers in context, health-care-products companies saw 10.91 percent net profits last year; home furnishers saw 4.63; household-product makers saw 11.71; restaurants saw 5.69; home builders saw 9.04; and online retailers saw 4.95.
Even with sales booming, grocery stores are having trouble realizing profits. One reason for this is that it’s one of the most competitive major industries in the country. There are numerous national chains (Kroger, Albertsons), regional chains (Meijers, Publix), higher-end markets (Trader Joe’s, Wegmans, Whole Foods), big box chains (Walmart and Target), and Amazon. Competition has, and does, drive down prices.
So an alternative theory — and I’m just spit-balling here — is that inflation is really happening, and all of Elizabeth Warren’s flailing is simply meant to try and divert attention away from the economic tribulations facing voters, which Democrats had promised to fix.