Federal Trade Commission (FTC) Chair Lina Khan said Thursday her agency will investigate the high cost of groceries in the United States as chain supermarkets bring in “enormous profits.”
Khan noted at a joint FTC and Department of Justice public meeting that the cost of groceries “skyrocketed during the pandemic, due in large part 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,” she said. “Many items though, are still too costly, and many large grocery chains are still raking in enormous profits. The FTC is determined to understand why. To make sure we can do so, I’ll be asking [the] commission to join me in launching an inquiry into grocery prices, to shed light on why it is that prices and profits remain so high, even as costs appear to have come down.”
A report the FTC released earlier this year highlighted margin expansion as a major factor in stubbornly high prices for groceries.
“Some firms seem to have used rising costs as an opportunity to further hike prices to increase their profits, and profits remain elevated even as supply chain pressures have eased. Larger retailers and wholesalers with considerable leverage over their suppliers were able to take more aggressive action to protect themselves,” FTC researchers stated.
The consumer price index, one common measure of inflation, went down for the first time since the pandemic in June, according to data released last month.