Grocery prices are way up. Is Albertsons exploiting them for profit? What an expert says
July 27, 2022
July 27th, 2022
These excerpts are from an article from the Idaho Statesman on July 27th 2022. Read the original article.
That 64-ounce bottle of juice that sold for $1.99 six months ago now costs $2.29. The box of crackers that was once $1.48 is now $1.64. Inflation is rampant, and nowhere do many Idahoans experience it with more frustration than in the supermarket.
So you may wonder: Are the grocers turning inflation to their advantage by raising prices more than needed to pass on their own rising costs? And thereby boosting profits?
When Albertsons Companies Inc., the Boise grocery giant, reported its latest quarterly earnings Tuesday, we asked an economist skilled in interpreting earnings reports what he saw.
His answer: Yes, Albertsons’ sales are rising — but its earnings show no evidence of profiteering.
The grocer has passed price increases onto shoppers to sustain itself amid the 40-year high inflation of the last year or so. But Albertsons’ financial statements for its first quarter of fiscal year 2022 show that the company didn’t bring in substantially larger earnings as a result of the inflationary environment, said Steven Peterson, an associate clinical professor of economics at the University of Idaho.
Albertsons is raising prices simply because its costs are going up, Peterson said in a Zoom interview. “They may get a little bit of a bump due to inflation, but they face market constraints as well,” Peterson said. “What’s driving this is the cost of the goods they’re buying.”
About the University of Idaho
The University of Idaho, home of the Vandals, is Idaho’s land-grant, national research university. From its residential campus in Moscow, U of I serves the state of Idaho through educational centers in Boise, Coeur d’Alene and Idaho Falls, nine research and Extension centers, plus Extension offices in 42 counties. Home to nearly 11,000 students statewide, U of I is a leader in student-centered learning and excels at interdisciplinary research, service to businesses and communities, and in advancing diversity, citizenship and global outreach. U of I competes in the Big Sky and Western Athletic conferences. Learn more at uidaho.edu