Current Events > Turns out companies are using inflation as an excuse to gouge LIKE I SAID!!!

(+) Yeah! (+)

Turn out I was right!
Crazy how logic works in that you can see a trend going on be like "this is happening."

I made threads about McDonalds and Chicfila raising prices for no reason but more profits. I said in general most companies are probably doing this.
Turns out, they are.

Here is an important line from article below that you should absorb and remember:
If rising food costs only reflected higher production costs, economists wouldnt expect net profits to rise, yet they are at historic levels.

So what can we do about it? Talk about it. Don't let your friends and family be idiots who think it is inflation or Biden doing this. It is greed and profits. When the general public realizes this, they won't let them get away with it.

https://time.com/6139127/u-s-food-prices-monopoly/

U.S. Food Prices Are Up. Are the Food Corporations to Blame for Taking Advantage?
But theres evidence that monopolistic market structures are making things worse. Food production has consolidateddramatically since the 1970s after changes in antitrust policy allowed more companies to buy up their competitors. Depending on who you ask, antitrust practitioners say markets are oligopolistic or dangerously concentrated when the top four firms control 40% to 50% of the market, or more. Higher levels of concentration give businesses more power to set prices and increase the likelihood of price-fixing or market manipulation. Today, the top four corporations control more than 60% of the U.S. market for pork, coffee, cookies, beer, and bread. In beef processing, baby food, pasta, and soda the top four companies control more than 80% of the U.S. market.With tight control over production food companies have more power to exploit pandemic disruptions and unfairly raise prices. The White House recently argued as much in a brief published in December and a January roundtable with farmers and ranchers. Monopolistic price gouging is admittedly hard to prove, but the Federal Trade Commission is on the case. In late November the antitrust enforcer requested that Walmart, Kroger, Kraft, and Tyson, among others, hand over information in an investigation into price hikes and food shortages.

There is one clear indicator of excessive monopoly power: record corporate profits.

If rising food costs only reflected higher production costs, economists wouldnt expect net profits to rise, yet they are at historic levels.

Non-finance corporations are reporting their largest profit margins in 60 years. For some 100 of the largest publicly traded companies these profit margins are 50% higher than in 2019. Net profit margins for top meat companies Tyson Foods, JBS, Marfrig, and Seaboard are up over 300%, according to the White House. Tyson earned $1.36 billion in the 2021 fourth quarter, more than twice as much as last year. McDonalds, Coca Cola, and Kraft Heinz also reported better than expected fourth quarter profits.

With all the media hype about inflation, companies may take advantage of shoppers inflation expectations to charge a little extra and pad their pockets.

Analysis of corporate earnings calls by Business Insider and More Perfect Union reveal that food corporations such as Pepsi, Kroger, and Kelloggs are bragging to investors about their ability to increase prices. Tyson told their investors that their pricing actions more than offset the higher [cost of goods]. Even Jerome Powell, chairman of the Federal Reserve, acknowledged at a Senate Banking Committee hearing Tuesday, Jan. 11, that companies are raising prices because they can.

The poor people have had it too good for too long!

Everyone knew this.

Including the trolls who insist that inflation only happens because people want a living wage without going decades into debt.

https://www.npr.org/2022/01/12/1072295047/inflation-is-still-surging-and-some-democrats-see-one-culprit-greedy-companies

Economist Isabella Weber of the University of Massachusetts, Amherst, argues the pandemic has created opportunities for some companies to pad their bottom line not just covering higher costs but expanding their profit margins as well.

"It's a little bit like the guy who sells water at $20 a bottle after a hurricane, which is only possible because everybody wants to buy water but the local supply is fixed," said Weber.

reportedly, 60% of the "inflation" US consumers experienced over the last year has gone directly to inflating corporate profits

https://www.globaltrademag.com/more-than-half-of-retail-businesses-are-using-inflation-to-price-gouge/

In November, Digital.com surveyed 1,000 retail owners and executives to discover how inflation is impacting profitability, pricing, and discount offers this shopping season.
Our findings revealed that more than half of retail businesses are using inflation to drive up prices higher than whats necessary to offset increased costs.

Key Findings
-56% of retail businesses say inflation has given them the ability to raise prices beyond whats required to offset higher costs
-Over half of retailers have increased prices by 20% or more on average
-52% of businesses are offering fewer or no discounts this holiday season
-Shrinking discounts and increasing price of complementary products are most popular ways businesses are driving up prices

When asked how recent inflation has impacted profitability, 56% of retail businesses responded that inflation gave them the ability to raise prices beyond offsetting costs.

Large enterprises (LEs) were more likely than small and medium-sized businesses (SMBs) and small and medium-sized enterprises (SMEs) to say they were using inflation to more than offset costs at a rate of 63% compared to 52% of SMBs and 55% of SMEs.

Whats interesting about our findings is that more than half of respondents say that while they used inflation as a reason for price increases, they expect higher profits as a result, says Digital.coms small business expert, Dennis Consorte.

@g980
@Solid_Snake07 @Squall28 @Gobstoppers12

How will you defend this?

Yeah, inflation isnt some immutable law of the universe, its just capitalists wanting more profit.

WingsOfGood posted...

How will you defend this?

I won't. It's pretty obvious that companies are taking advantage of this time to increase prices.

Almost like capitalism is a cancer that bleeds the poor until they have nothing left

funny how all the sudden this is a given and everyone knows this is what was happening.

yet when I made those threads the majority of posters refused to see this and were against it and saying the same tired things like "all those stimulus packages made everything go up!!!" blah blah

WingsOfGood posted...

funny how all the sudden this is a given and everyone knows this is what was happening.

yet when I made those threads the majority of posters refused to see this and were against it and saying the same tired things like "all those stimulus packages made everything go up!!!" blah blah

Let's be clear. Just because this is a big factor, doesn't mean it's the only factor.

Squall28 posted...

Let's be clear. Just because this is a big factor, doesn't mean it's the only factor.

https://www.theguardian.com/commentisfree/2021/nov/11/us-inflation-market-power-america-antitrust-robert-reich

But theres a deeper structural reason for inflation, one that appears to be growing worse: the economic concentration of the American economy in the hands of a relative few corporate giants with the power to raise prices.

If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers.

But theyre raising prices even as they rake in record profits. How can this be? They have so much market power they can raise prices with impunity.

Viewed this way, the underlying problem isnt inflation per se. Its lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.
In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.

But P&G is making huge profits. In the quarter ending 30 September, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. It even spent $3bn during the quarter buying its own stock.

It could raise prices and rake in more money because P&G faces almost no competition. The lions share of the market for diapers, to take one example, is controlled by just two companies P&G and Kimberly-Clark which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases.

Or consider another consumer product duopoly PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced it was increasing prices, blaming higher costs for some ingredients, freight and labor. Rubbish. The company didnt have to raise prices. It recorded $3bn in operating profits through September.
If PepsiCo faced tough competition, it could never have gotten away with this. But it doesnt. To the contrary, it appears to have colluded with Coca-Cola which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

You can see a similar pattern in energy prices. If energy markets were competitive, producers would have quickly ramped up production to create more supply, once it became clear that demand was growing. But they didnt.

You want to be clear, you need to actually be clear.

Regulatory Capture needs to be unwound somehow.
That's why there's no competition.

can't wait to see that the max punishment given to these companies is a bribe to the govern- I mean fine.

https://www.nbcnews.com/business/consumer/food-suppliers-blame-inflation-price-hikes-lawmakers-say-padding-bill-rcna9200

The levers of government are being primed for an escalating crackdown on excessive food price inflation, which the Biden-Harris Administration and its Congressional allies believe is partially a result of over-concentration and lack of competition in the food and grocery supply chain.
With inflation at its highest point in almost 40 years, American families are facing higher prices at the checkout and are making do with leaner meals. Once deemed essential, workers in grocery stores now say they feel expendable, and have been rewarded with only marginal increases in wages they say leave them unable to cover their own rising food costs.

Meanwhile, producers and grocers are exploiting the pandemic to jack up prices more than necessary to pass on increased costs to consumers, Sen. Elizabeth Warren, D-Mass., blasted in a new letter sent to the heads of Kroger, Albertson's, and Publix and shared exclusively with NBC News.

Your company, and the other major grocers who reaped the benefits of a turbulent 2020, appear to be passing costs on to consumers to preserve your pandemic gains, and even taking advantage of inflation to add greater burdens, Warren wrote.

In 2020, supermarkets saw sales increase by 11 percent over the prior year, an average of $63 billion a month, according to the Census Bureau's monthly Retail Trade report. It's a trend that has continued into 2021.

But instead of reinvesting record profits to raise wages and improve working conditions, these companies initiated stock buybacks and boosted executive compensation, the letter noted.

Questionmarktarius posted...

Regulatory Capture needs to be unwound somehow.
That's why there's no competition.

This requires the public to be aware how corporations are both taking advantage and have monopolies which aren't called that so they don't get hit.

That is because the public is the one responsible for voting in the people who would fix this.

But what happens when we discuss these issues? People do their best to handwave them away and say Capitalism is super wonderful and you should be thankful you don't like in a socialist country like the USSR.

Maybe it is time you realize your own contributions to this.

It's not hard to put it together when mega corporations keep stating record profits year after year.

no no it can't be that. it must be LAZY PEOPLE! AND DEMOCRATS!!!!

https://gamefaqs.gamespot.com/a/user_image/9/1/5/AAefUOAAC5hr.jpg

Lol at a certain user. They said banks were right that wages is the cause of inflation :D

No shit Sherlock. Companies are raising prices to make more money?! Who would have thought?! Like how the fuck are you posting this like its some big revelation?

Will_VIIII posted...

It's not hard to put it together when mega corporations keep stating record profits year after year.

It is hard for alot of people. Tell your friends and family.

Bleuets posted...

No shit Sherlock. Companies are raising prices to make more money?! Who would have thought?! Like how the fuck are you posting this like its some big revelation?

You get your first job yet?

Bleuets posted...

No shit Sherlock. Companies are raising prices to make more money?! Who would have thought?! Like how the fuck are you posting this like its some big revelation?

Not more money, more profit, there is a difference.
And the attitude of "companies exist to make more money! This is what they do!" is one of the dumbest inventions of the internet and is of some blame why we are at where we are at.

It also show how dishonest people are when they talk about socialism and are like "but we need jobs! how do we expect jobs to exist! we must thank them somehow!!!!!" blah blah blah

then we discuss how capitalism exploits and they are like "no shit sherlock! of course!"

ugh

sorry why does price finding need to be defended

if theyve outpriced demand, prices will go back down

g980 posted...

sorry why does price finding need to be defended

if theyve outpriced demand, prices will go back down

how do monopolies work?

WingsOfGood posted...

how do monopolies work?

what monopoly are you talking about here
name the company

g980 posted...

what monopoly are you talking about here
name the company

So you refuse to read the articles?

Also I should point out this man called wages sticky but now pretends these food prices are going to drop.

.....

g980 posted...

what monopoly are you talking about here

it turns out the optimal scenario is a duopoly or triopoly, engaging in "competition theater".

WingsOfGood posted...

You want to be clear, you need to actually be clear.

Man this is why I didn't bother posting before you @me. You're obsessed with wordplay gotchas. It's clear there are a lot of other things at play if companies could've raised prices before now, they would have.

Don't @me again.

WingsOfGood posted...

So you refuse to read the articles?

Also I should point out this man called wages sticky but now pretends these food prices are going to drop.

.....

The article that listed 4-5 companies in every example? Yea i dont see the monopoly

@g980

I will make it easy for you. Here you go.

What monopolies? Just read

https://www.theguardian.com/commentisfree/2021/nov/11/us-inflation-market-power-america-antitrust-robert-reich

But theres a deeper structural reason for inflation, one that appears to be growing worse: the economic concentration of the American economy in the hands of a relative few corporate giants with the power to raise prices.

If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers.

But theyre raising prices even as they rake in record profits. How can this be? They have so much market power they can raise prices with impunity.

Viewed this way, the underlying problem isnt inflation per se. Its lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.
In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.

But P&G is making huge profits. In the quarter ending 30 September, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. It even spent $3bn during the quarter buying its own stock.

It could raise prices and rake in more money because P&G faces almost no competition. The lions share of the market for diapers, to take one example, is controlled by just two companies P&G and Kimberly-Clark which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases.

Or consider another consumer product duopoly PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced it was increasing prices, blaming higher costs for some ingredients, freight and labor. Rubbish. The company didnt have to raise prices. It recorded $3bn in operating profits through September.
If PepsiCo faced tough competition, it could never have gotten away with this. But it doesnt. To the contrary, it appears to have colluded with Coca-Cola which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

You can see a similar pattern in energy prices. If energy markets were competitive, producers would have quickly ramped up production to create more supply, once it became clear that demand was growing. But they didnt.

Yet another reason why everyone should lie on their resume

Squall28 posted...

Man this is why I didn't bother posting before you @me. You're obsessed with wordplay gotchas. It's clear there are a lot of other things at play if companies could've raised prices before now, they would have.

Don't @me again.

You continue wanting to downplay corporate greed even as you claim to think this was something anyone could see happening.
Well, all I can say to you is, I hope you enjoy the continued rising costs and the comfortable life you had isn't impacted.
Then you might remember the days you tried to troll that Wingsofgood guy on a message board when he was just trying to help raise awareness to systematic problems that need to be addressed not just to help the poor, but even you and your family as well.

BignutzisBack posted...

Yet another reason why everyone should lie on their resume

Not sure how that correlates?
Food companies use monopoly power to gouge the price of food means to lie on a resume?

I guess you meant because corps just want to bleed you dry so why respect them enough to tell the truth?

Did people not know that..?

rexcrk posted...

Did people not know that..?

The only people who assume otherwise are in denial, or have already forgotten the "gas crisis" from the Dubya era.

Inflation tends to make things more expensive.

g980 posted...

what monopoly are you talking about here
name the company

Monopoly isnt the right word. Cartel would be closer. You get a few companies who control most of the market and they coordinate price increases and whatnot. It is illegal, but whos going to stop them and actually enforce the laws? The regulations to ensure competition have been getting weaker and weaker.

SweetieBeIle462 posted...

Inflation tends to make things more expensive.

Well there's that, but there's also companies making record profits while blaming price increases on inflation, tax changes, healthcare requirements etc.

I mean the smooth brains fall for it

Everyone with a brain should have known this.

Will_VIIII posted...

I mean the smooth brains fall for it

It's a bit more nuanced than that, but yes, there's a hell of a lot of opportunism.

Capitalism might be able to actually work if people weren't deceitful and insanely greedy. Like, even a mild greed wouldn't sink anything. But the amount of greed that goes on here is fuckin insane. And then a bunch of fuckin idiots stand by the greedy individuals that hold them back.

Lost_All_Senses posted...

And then a bunch of fuckin idiots stand by the greedy individuals that hold them back.

We've collectively lost our sense of caveat emptor.

Questionmarktarius posted...

It's a bit more nuanced than that, but yes, there's a hell of a lot of opportunism.

A good example is when Papa John's CEO blamed Obamacare on why he needed to raise prices by like $2 but a detailed breakdown showed that only a .15 increase was needed for the company to maintain their profit margin

WingsOfGood posted...

You continue wanting to downplay corporate greed even as you claim to think this was something anyone could see happening.
Well, all I can say to you is, I hope you enjoy the continued rising costs and the comfortable life you had isn't impacted.
Then you might remember the days you tried to troll that Wingsofgood guy on a message board when he was just trying to help raise awareness to systematic problems that need to be addressed not just to help the poor, but even you and your family as well.

The awareness is there. Everybody is aware that there are systematic problems with the US oligarchy. Myself included.

But we can't do anything about it. Nothing will ever change. Regardless of how much people whine on message boards.

Once you've accepted it, you'll find you have a lot more energy for other things in life, even if some of them are more expensive. I find living to be a lot more freeing.

Lost_All_Senses posted...

Capitalism might be able to actually work if people weren't deceitful and insanely greedy. Like, even a mild greed wouldn't sink anything. But the amount of greed that goes on here is fuckin insane. And then a bunch of fuckin idiots stand by the greedy individuals that hold them back.

Capitalism requires lots of competition to function. Legitimate competition makes it so you cant easily raise prices to get more profit because youd just shift businesses to your many competitors. If you try to lower costs, you need to be careful or youll wreck your reputation and lose business. When theres only a couple of companies, it is easier to get everyone to cooperate and increase profits.

uwnim posted...

Capitalism requires lots of competition to function. Legitimate competition makes it so you cant easily raise prices to get more profit because youd just shift businesses to your many competitors. If you try to lower costs, you need to be careful or youll wreck your reputation and lose business. When theres only a couple of companies, it is easier to get everyone to cooperate and increase profits.

It's more so what we have isn't regulated. When you can just up prices of cleaning products because people need it more to not catch a disease and die, we lost our way. I'mma be honest, I don't know how much that is capitalism. I just know what we're doing in this country is so fucked up. How does selling more mean you gotta raise prices, if you were already around long enough to make a very profitable company.

Lost_All_Senses posted...

When you can just up prices of cleaning products because people need it more to not catch a disease and die, we lost our way.

If that pisses you off, learning about how regulatory-capture works may well give you a stroke.