Angela Poe Russell: Why we should feel sorry for giant, billion-dollar grocery chains

Jul 3, 2024, 11:22 AM | Updated: 11:45 am

grocery retailers...

Customers browse the aisles of a grocery store. (Photo: Joe Raedle, Getty Images)

(Photo: Joe Raedle, Getty Images)

It is tough running a business in general, no matter the size, and when you run one that offers something every human needs — it can be even more challenging. And, let’s face it, everyone needs to eat.

Treasury Secretary Janet Yellen highlighted some of the challenges during an interview with Yahoo Finance. The reporter lamented the cost of groceries, using the phrase “sticker shock” to describe it. Yellen explained that many grocery retailers are dealing with increased expenses.

“I think largely it reflects cost increases including labor costs increases that grocery firms have experienced,” Yellen said in the interview.

Seattle grocery sticker shock: What to do about the high prices

And that’s true. For example, Kroger increased the hourly wage of its associates from $19/hour to $25/hour with benefits factored in. That’s a 33% increase in the last five years, according to Kroger.

Somehow, Kroger still managed to squeak out a profit — a humble $3.1 billion. But that number doesn’t include taxes. They did much better in 2022 with an operating profit of $4 billion. That same year, Walmart Inc. had an operational profit of $21 billion in comparison.

Grocery chains deal with modest profits and scrutiny too

And larger grocery stores are facing a lot of scrutiny. The Federal Trade Commission (FTC) released a report that indicated large grocery stores exploited product shortages during the pandemic, claiming stores raised prices more than was needed to cover any added costs. Then, the FTC claimed the stores are still taking in “excessive” profits.

In 2021, that number was 6% above total costs. In 2023, it rose to 7%.

Following that report in May, Democratic lawmakers called on the president to investigate grocery chains for price manipulation. Grocery prices are 24% higher than pre-March 2020 (when the pandemic officially began in the U.S.).

From the attorney general’s office: Kroger-Albertson merger ‘bad’ for consumers

But look, the good news is the rate of increase is slowing down. And Yellin said that large grocery retailers are being thoughtful about keeping the essentials in check.

So while times are tough for families trying to keep food on the table, just remember you’re not bearing the burden alone.

Angela Poe Russell is a local media personality and a fill-in host on KIRO Newsradio. You can read more of her stories here.

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Angela Poe Russell: Why we should feel sorry for giant, billion-dollar grocery chains