Biden Calls Out Grocery Stores for ‘Ripping People Off’ and Playing the Inflation Blame Game

By: Georgia | Published: Feb 12, 2024

President Biden has voiced concerns over the high cost of groceries, attributing the issue to large grocery chains overcharging consumers. His comments aim to address the financial burden that inflated food prices have placed on American families.

“There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” Mr. Biden remarked during a speech in South Carolina.

Addressing Inflation and Price Gouging

In his efforts to address inflation, President Biden pointed out that, despite successes in lowering inflation rates, certain practices like price gouging and “greedflation” continue to burden consumers.

Multiple rows of brown and white eggs nestled in open cardboard cartons

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“Inflation is coming down. It’s now lower in America than any other major economy in the world,” Biden said. “The cost of eggs, milk, chicken, gas, and so many other essential items have come down.”

The Impact of High Prices on Consumers

The issue of high grocery prices is more than just an economic concern; it significantly affects consumer sentiment.

A family of three, with a man, a woman, and a young girl, is shopping in a grocery store. The man is holding a bag of pasta, while the woman, who appears concerned, is brushing her hair back, and the young girl is looking at something in her hand

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A recent Axios survey revealed that 59% of respondents felt “angry, anxious or resigned” while grocery shopping, with groceries being the primary area where they feel the impact of inflation.

Slowing Inflation and Persistent High Prices

The New York Times reports that despite a deceleration in inflation, with food prices for home consumption rising by just over 1% as of December, according to the Labor Department, the Biden administration acknowledges that prices remain prohibitively high for many American households.

Two paper grocery bags on a wooden floor, filled with various fresh foods. One bag contains bright red apples and a loaf of packaged bread, while the other is packed with a head of green cabbage, a bunch of ripe bananas, and what appears to be packaged meat

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This situation underlines the complexity of the economic challenges facing the administration, especially as it relates to making living costs more manageable for the average citizen.

Challenges in Addressing Grocery Price Inflation

The administration admits to the difficulties in swiftly addressing the high cost of groceries, which are partly attributed to supply chain disruptions among other factors.

President Joe Biden, dressed in a suit and tie, is captured mid-speech against a dark background, with a microphone in the foreground to his left

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Bharat Ramamurti, a former economic aide to Mr. Biden, emphasized the dilemma, stating, “It’s hard to figure out what the short-term policy response is in this situation.”

Scrutiny of Grocery Chain Mergers

CNBC reports that the Federal Trade Commission is reviewing a potential merger between Kroger and Albertsons, two of the largest grocery chains, with widespread expectations that the merger will be blocked due to concerns over reduced competition and higher prices for consumers.

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This regulatory scrutiny is part of broader efforts to ensure competitive practices in the grocery industry, which directly impact pricing and consumer choice.

Kroger Responds to Biden's Criticism

In response to President Biden’s critique, Kroger has defended its pricing strategies, arguing that its proposed merger with Albertsons would ultimately benefit consumers by lowering prices, The New York Times reveals.

An individual is seen loading a pack of bottled water into the back seat of a red pickup truck in a parking lot outside a Kroger grocery store. The store's sign is prominently displayed in the background

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Keith Dailey, Kroger’s group vice president of corporate affairs, stated, “We agree with President Biden: Too many grocers in America have increased margins in contrast to Kroger, who have reduced our margins consistently for nearly 20 years to save customers billions.”

Analysis of Grocery Profit Margins

The New York Times reports that a White House Council of Economic Advisers analysis suggested that high profit margins among grocery retailers might be contributing to persistent high food prices.

A customer is walking down an aisle in a brightly lit supermarket, passing by various products and promotional signs advertising "Thousands of ROLLBACKS across the store." The aisle is flanked by shelves stocked with cleaning supplies and groceries, with colorful product packaging and price tags visible

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The analysis, relying on data from the Census Bureau, showed an increase in margins for food and beverage stores since the pandemic began, reaching levels not seen in two decades.

External Factors Affecting Grocery Prices

Apart from profit margins, The New York Times explains that various other factors such as avian flu impacting egg prices and supply chain disruptions have been identified as contributing to high grocery prices.

A group of chickens with varying feather patterns foraging in the grass. The image prominently features a white chicken with black speckles in the foreground, along with a brown chicken and others with white feathers

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This broader context highlights the complex interplay of global and domestic issues affecting food pricing, beyond the control of individual retailers or even national policies.

The Influence of the Labor Market on Food Prices

The Federal Reserve Bank of Kansas City has identified the strong U.S. job market and associated wage gains as significant factors in the rise of grocery prices.

A Walmart employee, seen from the back, wearing a blue vest with a large yellow smiley face on it, is restocking cake mixes on a supermarket shelf. The employee is wearing a green baseball cap and is holding a package of spread frosting

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This economic environment has led to increased costs in producing and distributing food, which are then passed on to consumers.

Government Efforts to Alleviate Grocery Prices

The New York Times notes that the Biden administration has undertaken several measures aimed at reducing grocery prices, including investments in the meatpacking industry and adjustments to federal food assistance benefits.

Raw cuts of red meat are organized on metal racks and white trays in a meat processing facility. Workers wearing protective clothing, including hairnets and face masks, are visible in the background

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These initiatives reflect a comprehensive approach to addressing the factors driving up food prices, from enhancing industry competition to directly supporting low-income families through increased food stamp values.

The Future of Biden's Grocery Pricing Policy

As President Biden continues to focus on reducing grocery prices, his administration is exploring various strategies to apply pressure on large grocery chains.

President Joe Biden, dressed in a suit and blue tie, is captured mid-speech against a background of blurred American flags

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With a commitment to addressing the concerns of American consumers, the President has emphasized the importance of fair pricing, stating, “Americans, we’re tired of being played for suckers. And that’s why we’re going to keep these guys — keep on them and get the prices down.”