Major retailers accused of profiteering from rising inflation

Some of the largest retailers in the country are using rising inflation rate A corporate watchdog group on Friday accused that as an excuse to raise prices and raise billions of dollars in additional profits.

Companies such as CVS Health, Kroger and TJX, the parent company of TJ Maxx, have unnecessarily raised their prices in 2020 and 2021, when Americans were dealing with an economic fallout. coronavirus pandemicAccountable.US said in a new report good, Instead of keeping prices stable for struggling families, corporations charge Americans more and prioritize benefits, the group claims.

Accountable.US said it examined the financial statements of the nation’s top 10 retailers over the past two years — including Lowes and Target — and found that they collectively added $24.6 in their profits for a total of $99 billion. million increased.

New figures come as companies enjoy them most profitable year from the 1950s. Profit before tax last year increased by 25% over 2020, far more than the increase in consumer prices. The report highlights the ongoing debate about the causes of inflation, with some consumer advocates arguing that corporations are using inflation as a justification for passing on even greater price increases to consumers.

Companies use some of that profit to boost CEO compensation and deliver higher benefits to shareholders, such as increased dividends or stock buybacks, reports fees. In fact, many corporate leaders have claimed their ability to pass along price increases to consumers.

“When corporate profits are at their highest level in nearly 50 years and companies are showering their shareholders with billions of new profits over the past year, it raises serious questions as to whether industries like retail should pass on prices to households.” Had to increase that much.” Accountable.US President Kyle Herrig said in a statement to CBS Moneywatch.

Amazon, CVS Health, Kroger, Lowe’s, Target and TJX did not immediately respond to requests for comment on the report.

Home Depot told CBS MoneyWatch that the Accountable.US report is misrepresenting why the company’s 2021 profits rose.

“As our customers advocate for value, we are working relentlessly with our suppliers to keep costs as low as possible for our customers,” the company said in a statement. “Our growth is based on huge demand in home improvement.”

Inflation: Supply Chain, Demand Issues

Certainly, inflation is rising rapidly due to a number of underlying economic issues, such as supply-chain constraints, labor shortages and strong consumer demand. Inflation in the US hit a new 40-year high in March along with consumer prices Jumped 8.5% in the last 12 months Fastest annual rate since the Reagan administration.

Retail executives have been open about their recent price hike. Kroger Chief Financial Officer Gary Millerchip said during its 2021 earnings call that the grocery store chain is “passing along higher costs to the customer where it makes sense to do so.” Also last year, TJX CEO Ernie Herman told investors that the company had a “strategy to grow the retail business”. [prices] The select items are well under way, and we are confident that it is working very effectively.”

Some companies have publicly blamed inflation for driving up prices, but Accountable.US argues in its report that those increases are more than necessary to cover their own increased costs.

Among other examples, the report said Lowe’s reported a profit of $8.4 billion in its most recent quarter, as it touted its “new pricing strategies.” TJX, the parent company of TX Max, Marshalls and Home Goods, saw a $3.3 billion jump in profits last year as the CEO spoke out about the company’s “aggressive” price hikes. Target boosted its profits to $6.9 billion in 2021, in a year its CEO called “a year of record growth.”

Accountable.US said it expects the retailer’s profits to continue to increase by billions because of the price hike. The National Retail Federation estimates that retail profits will grow between 6% and 8% in 2022.

“It is time for corporations to finally help ease the burden that Americans bear during the health crisis,” Herrig said. “Corporations can start by stabilizing prices for consumers rather than chasing more profits — on top of paying their fair share in taxes at the end.”

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