Top US corporations raising prices on Americans even as profits surge

  1. I have a question, then. If all this is so apparent and everything is becoming unaffordable...what's gotta give? Or I guess, in realistic terms..when would this all depress? Or is it just going to continue to exacerbate with consistent inaction and ineffective consequences?

  2. It’s short term growth over long term growth. Businesses push for a “what have you done for me lately” mentality which in turn creates the illusion of success based on immediate gains.

  3. Normally the check on raising prices would be competitors undercutting their prices, so if that's not happening despite record profits then maybe there is some sort of monopoly or price fixing going on

  4. People need to stop buying shit. For every person you see online complaining theres a dozen people who just don't give a fuck.

  5. isn't this where income inequality and the divergence of the middle class comes in? if you're doing well, you can easily afford the price hikes and keep the money moving, while those not doing well effectively drop out of the economy

  6. Thing is... it's not unaffordable.. majority of people make more money and have more wealth now than before and aren't as price sensitive. Things are more expensive and people have noticed and complain but still buy because they can afford to

  7. Moral hazard. The treasury is gonna make more stimulus checks. That's what they are betting on, just as in '08. Americans have their retirement money glued to stock prices. If anyone knew when, they would be rich and surely not here in this forum. The answer is "when are the US institutions expect that living standards and consumption will actually decline?" then add the variables of latency in monetary policy (if other CB don't hike following the FED that will appreciate the dollar and make export less competitive); China whose capital outflow due to foreseeable stagflation+recession is flooding the US pumping asset inflation up; China's COVID lockdowns (which are merely for internal politics) hindering supply chains and lowering exports (and increasing import cost for those who import e.g. the US). After the US, the Euro will follow the dollar under the strain of deleveraging. But of course, add one more external variable and anything can happen.

  8. People need to stop paying for products. Buy just the basics and watch companies see a decrease in revenue. They’ll cut prices but not until it hits their sales revenue.

  9. Whats best for business: The system will be pushed to its limits and stopped right before a turning point to full blown public movement(revolution?)

  10. In my opinion, all these markets are trying to figure out how to readjust pricing models to maximize profit (that's how they're designed to run). As competition enters the market with the large profit, it'll push rates down, however, this takes time because you just went into an extremely unprofitable business cycle when things were shutdown for COVID meaning less investors willing to jump in the pool especially with interest rates rising.

  11. Prices at grocery yesterday were noticeably higher than last week! 4.39 for coffee mate. This crap was 2.79 last summer and $3.79 last week…now 4.39.

  12. I’m really confused why so much effort is being spent to blame this on eeeeevil corporations, when the PPI is like twice as inflated as the CPI.

  13. This is evidence of monopoly, oligopoly or price fixing right? This isn't how competitive markets behave as high profits suggest it is not cost driven.

  14. I think this is the problem. With such huge companies owning the markets, there is no competition to drive down prices. They can do what they like.

  15. It's not necessarily price fixing or monopoly, it's more of a cartel by observation, not any coordinated effort.

  16. No? Price of oil is set by 9 big indexes in the world who all have competing prices. Inflation is greatly tied to the price of oil because it controls logistics, fuel, most chemicals and home heating. The goal of these indexes is to get the highest price they can for the product, so if they see their competitors raising their prices they can feel confident raising them a little.

  17. This is exactly how a business behaves. The goal isn't bottom line prices, it's top end prices willing to be paid for max profit. The only evidence that this provides is that there are a whole lot of consumers in the US who will bitch about prices while still blowing all their discretionary money. And when the discretionary money runs out, the credit cards start getting filled. When the credit cards are all maxed, that's when companies will have to take a deep look at pricing and costs.

  18. Part of the problem for sure. Even the second on the list “Albertsons” is owned by Cerberus management (which is a creepy name for a company btw) that owns several other chains such as Safeway as well.

  19. Well we have also created a narrative for them to use. When one company follows it the others will as well. Even though they could be in complete different sectors of the market. Because hey we raised prices and our sales haven't dropped off so let's keep them high.

  20. Well, not necessarily. If you have a monopoly is owned by the consumers, the company won't act against the interests of the consumers because that's not logical.

  21. This is an interesting comment. It makes sense intuitively, but I'm curious if what you're saying been demonstrated. I did a quick google scholar search (CPI, PPI, Profitability) and didn't find any papers that linked corporate profitability to the CPI-PPI spread.

  22. There are NDA's but as someone in the event space for fortune 500 companies - they are fine. Even had one so egregious in their statements that if they want me to return I will be doubling my rate.

  23. Is there an enormous opportunity here? It's difficult to undercut a razor-edge market, but surely in this case, with arbitrary prices, seems like plenty of room for competitors to swoop in?

  24. The answer is decades of corporate consolidation to form ologopolistic competition, and in some cases monopoly, where there is a lot of deadweight loss but the barrier to entry is so high that there is no chance to compete for new market entrants (especially as interest rates rise, startup financing shrivels)

  25. You are absolutely right. It takes time though. And that’s what I believe we’ll see over time. Competition will increase as more enter markets. We’re in a transition phase.

  26. I might be stupid, but doesn't it make sense for companies to have higher profits during an inflationary period? The cost of everything is increasing, but Americans have money saved up and pent-up demand from the pandemic. The airline CEOs think there will be record breaking demand for flights this summer. Stuff costs more and people are willing to pay. With all the consolidation and large conglomerates, there's less competition to lower prices. Businesses don't decrease prices out of kindness.

  27. Yes, this article is an attempt to shift blame for the true cause of inflation: excessive money printing by the Fed (without commensurate increases in output) and fiscal stimulus (including direct payments, moratoriums and deferments). Reddit loves to hate on corporations but we wouldn’t be in this situation without all the money being pumped into the economy without commensurate productivity increases.

  28. If the costs of everything is increasing, that means profits should either be at risk of shrinking or being held steady with price increases. The fact that profits are also increasing means there is some price fixing happening. It’s not in every industry, the ones that are monopolies or oligopolies are definitely taking advantage of the situation to squeeze consumers just a bit more.

  29. Profit is measured in inflated dollars leveraged through currency creation. If the dollar sees true inflation at 15% instead of the currently reported fallacy of 7-8% then a 20% profit isn't much of a gain in real terms. Inflation affects both the front and back end calculations.

  30. why wouldn't you though? Jack prices 20%, blame Biden, roll on with massive profits. Honestly anyone not raising prices right now is losing out

  31. The FED keeps seeing costs of living increase at a rapid pace and have done nothing to tame inflation. All talk, no bite.

  32. Wages and low unemployment should be a larger part of this analysis. Wages are increasing for lowest earners at highest rates in 30 years, hence the low profitability of restaurants. Still not outpacing inflation, but a positive trend for the less well off. The flip side is commodities which do well in tight supply chains. Steel, which is the most profitable industry in the analysis, was priced very competitively for years when China was overproducing. Are the benefits of those cheap commodities due to corporate benevolence?

  33. If companies are forced to raise prices due to limited supply, wouldn't their profit margin increase at an equal rate as well? Seems a store making 1% off merchandise would still see a slight increase in profit.

  34. If a company makes more in PROFIT but their MARGINS stay the same it means they are popular and selling more product. Not price gouging.

  35. As a Keurig Dr Pepper employee, prices are going up to match the competition (which I morally disagree with), mostly because of the surge in cost of goods (specific ingredients are suddenly hard to source), increases in transportation costs, and large frontline pay increases to attract/retain employees. Kinda hoping the price increases cool off the market a bit. That “83% rise in profits” is from maxing out our production capacity and still not being able to meet demand, as well as being waaaay short handed on labor..

  36. CORPORATE America is gonna make sure inflation doesn't affect their bottom line. But the Average American suffers. What are we supposed to do? Threaten our employers and demand a raise ?

  37. I hate these headlines, "profits surge while prices are going up" kinda stuff doesn't actually mean anything. Corporate profits were rising as prices surged in Venezuela a few years ago but the money that made up those profits was losing its real value at an incredible rate.

  38. This sub clearly doesn't understand or care about economics at all. They just want to complain about the big bad greedy business men

  39. We have a tool to fight them. Decentralization. It allows us to earn by providing the services ourselves in a secure and established way.

  40. So the Guardian is comparing prices from recent earnings to profits from 2 years earlier. I wonder what happened 2 years ago that might have effected corporate prices?

  41. We need to refocus on what we need and who we do business with. This corporations are people crap is ridiculous. Support the little guy and buy local whenever possible. The problem is in the fact they have had legal teams and lobbyists constantly working to control anything and everything they can even if it takes decades. The only way to change anything is in the pocketbook it seems these days. Nothing else matters. Nothing.

  42. All of this makes sense as the survivors of the COVID market were going to exert their market power. On top of this, inflation has allowed for companies to get away with this as the optimal profit location has shifted for most companies especially given the large change in aggregate demand. Wealth loss for the consumer is usually a price paid when markets are destabilized.

  43. This will back fire. That will leave room for competitors to undercut the leading competition, people won’t stand for price hiking, the market will adjust accordingly.

  44. Laws of supply and demand… it’s no surprise the prices are rising when government policies have caused a decrease of supply and an increase in demand.

  45. Surplus demand also means there's opportunity for new players in the market. There's never been a better time to start a business.

  46. Are corporate -profits- really higher than ever? Seems more like there are mostly zombie companies with hugely inflated share prices but little to no actual earnings growth. Most of the economy is potentially bankrupt once share prices correct.

Leave a Reply

Your email address will not be published. Required fields are marked *

Author: admin