President Biden has begun to accuse stores of overcharging shoppers, as food costs remain a burden for consumers and a political problem for the president.
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The economics and politics of grocery prices continue to weigh on shoppers even as the rate of inflation is falling.
President Biden, whose approval rating has suffered amid high inflation, is beginning to pressure large grocery chains to slash food prices for American consumers, accusing the stores of reaping excess profits and ripping off shoppers.
“There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” Mr. Biden said last week in South Carolina. Aides say those comments are a preview of more pressure to come against grocery chains and other companies that are maintaining higher-than-usual profit margins after a period of rapid price growth.
Mr. Biden’s public offensive reflects the political reality that, while inflation is moderating, voters are angry about how much they are paying at the grocery store and that is weighing on Mr. Biden’s approval rating ahead of the 2024 election.
Economic research suggests the cost of eggs, milk and other staples — which consumers buy far more frequently than big-ticket items like furniture or electronics — play an outsized role in shaping Americans’ views of inflation. Those prices jumped by more than 11 percent in 2022 and by 5 percent last year, amid a post-pandemic inflation surge that was the nation’s fastest burst of price increases in four decades.
The rate of increase is slowing rapidly: In December, prices for food consumed at home were up by just over 1 percent, according to the Labor Department. But administration officials say Mr. Biden is keenly aware that prices remain too elevated for many families, even as key items, like gasoline and household furnishings, are now cheaper than they were at their post-pandemic peak.
And yet, there is a general belief across administration officials and their allies that there is little else Mr. Biden could do unilaterally to force grocery prices down quickly.
Grocery store margins are rising
Operating profit margin by type of retailer
Notes: Operating margin defined as sales, receipts and operating revenue as a share of operating expenses. Data shown as four-quarter rolling average.
Source: Council of Economic Advisers
By The New York Times
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Source: nytimes.com
