FTC launches investigation into grocers over high food prices

Federal officials are investigating the discrepancy between easing prices for grocery chains and the lack of affordable food for American families.

Federal Trade Commission (FTC) Chair Lina Khan on Thursday said that she will ask the commission to probe the tactics that big grocery chains are deploying “to hike prices and extract profits from everyday Americans at the checkout counter.”

Her comments came during the FTC and the Department of Justice’s first virtual public meeting of the Strike Force on Unfair and Illegal Pricing, which was established in March by the Biden administration to “strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anticompetitive, unfair, deceptive, or fraudulent business practices.”

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Kahn acknowledged that “inflation for grocery items has averaged zero so far this year,” with many popular items like cereal and pasta and potatoes costing less than they did last year. However, while the pace of price increases for food has slowed in recent months, grocery costs are still up more than 21% from the start of 2021, according to FOX Business calculations.

Despite cooling inflation, food prices have remained uncomfortably high, according to the latest government data. (Mostafa Bassim/Anadolu via Getty Images / Getty Images)

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Between 2020–2021, prices were largely driven by shifting consumption patterns and COVID-related supply chain disruptions, according to the United States Department of Agriculture (USDA).

In 2022, prices rose at their fastest pace since 1979 due in part because of the pathogenic avian influenza outbreak that affected egg and poultry prices and the conflict in Ukraine. which compounded other economy-wide inflationary pressures such as high energy costs, the USDA reported.

Federal Trade Commission Chair Lina Khan said the agency will use all of its tools to crack down on any underhanded tactics that big grocery chains may be using to raise prices on basic necessities. (Paola Chapdelaine for The Washington Post via Getty Images / Getty Images)

While grocery prices skyrocketed during the pandemic because of higher costs and supply chain disruptions, “in the year since, costs have fallen and supply chains have improved,” Khan said, adding that many items are still too costly, allowing large grocery chains to rake in enormous profits.

Given that, she argued that it “still isn’t clear that Americans are fully getting the competitive, affordable prices that they deserve.”

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“One of the top concerns I consistently hear about is high grocery prices every week. People stock up on the food that they need to feed their families,” Khan said. “And too often, people feel like too much of their paycheck is going towards covering the basics like meat or bread or eggs.”

Khan said the commission will use all of its tools to crack down on any underhanded tactics that companies may be using to raise prices on basic necessities, adding that this is “essential work that will help ensure that Americans can be free from economic coercion and indignities in the marketplace.”

The FTC didn’t name specific companies, though major players in the sector include Walmart, Amazon-owned Whole Foods, Kroger and Albertsons.

FOX Business reached out to Walmart, Whole Foods, Kroger and Albertsons for comment.