Food companies are blaming inflation for higher prices even as they collect soaring profits, The New York Times reports.
PepsiCo, whose prices are up about 17% in the last quarter, reported that its profit during that time grew more than 20%.
Coca-Cola also reported that its profits are up 14% from last year.
Chipotle, which raised prices by nearly 15%, saw its profits rise 26% in the last quarter.
“The recent earnings calls have only reinforced the familiar and unwelcome theme that corporations did not need to raise their prices so high on struggling families,” Kyle Herrig, the president of Accountable.Us, told the Times. “The calls tell us corporations have used inflation, the pandemic and supply chain challenges as an excuse to exaggerate their own costs and then nickel and dime consumers.”
Food prices soar:
The Bureau of Labor Statistics reported that the price of food eaten at home has soared by 13% over the last year.
Cereal and bakery items as well as dairy have risen by about 16%.
The cost of eating at restaurants has increased about 8.5% over that period.
Sean Connoly, president of Conagra Brands, argued that companies needed to maintain profit margins above inflation.
“We have to have healthy margins to be able to build out that innovation and get it to our customers in the market,” he said on a call with Wall Street analysts.
Same trend in oil:
The report comes days after oil giants reported record profits amid soaring gas prices.
ExxonMobil, Shell and Chevron were among the companies that reported the highest or second-highest level of revenue they’ve ever recorded as consumers are forced to pay up at the pump.
President Joe Biden on Monday warned that oil companies would face a “higher tax” on their excess profits if they do not reinvest in production to drive down prices.
“They have a responsibility to act in the interest of their consumers, their community and their country, to invest in America by increasing production and refining capacity,” he said. “If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions.”