Kroger, Walmart and McDonald’s.
Beata Zaouzel | Photos of Beata Zaouzel | Brandon Bell | Getty Images | Kamil Krzaczynski | Reuters
Pricey Big Mac meals and concerns about soaring grocery store prices have put grocery chains and consumer goods companies in the crosshairs of politicians.
WalmartMcDonald’s and hook up These are just a few of the companies caught up in the controversy high inflation in the 2024 elections.
Sens. Elizabeth Warren, D-Mass., and Bob Casey, D-Pennsylvania, sent a letter to Kroger CEO Rodney McMullen on Monday. It has questioned the grocer’s rollout of electronic shelf labels, arguing the technology could make it easier to raise prices on high-demand items. The letter also noted that the supermarket chain could become even bigger, depending on whether it closes its stores. Pending $24.6 billion acquisition Rival Albertsons.
Democrats — especially those like Casey trying to win races in hotly contested swing states — are trying to capitalize on frustrations with corporations inflation. This comes after Republicans spent years trying to blame President Joe Biden for rising prices. Also criticizes corporate “greedy strategies”.
For example, The X account, run by House Republican leadership, criticized Biden’s economic policies in late May, listing popular fast-food menu items for which customers are now paying higher prices at McDonald’s, Chick-fil-A and Taco Bell. (The source of the data is unclear, and McDonald’s denies its average price has increased that much.)
During the current presidential campaign, Democratic Vice President Kamala Harris and Republican former President Donald Trump have both pledged to combat persistent inflation while blaming different causes.
Harris said at the rally that she would Crack down on “price gouging” behavior by companies. Trump criticized the Biden administration’s policies at his own rallies and said he would end the “inflation nightmare.”
The fact that both parties have made fighting inflation a key platform of their campaigns shows how important the cost of food, gas and housing is to consumers across income levels, regions and political parties. The criticism could also increase pressure on companies to prove they can Lower price or offer.
Data from the U.S. Bureau of Labor Statistics show that inflation has fallen from multi-decade highs, with groceries increasing about 1.1% annually through June. But since June 2019, food at home has increased by 26.2%, while food away from home (which mainly includes restaurant meals) has increased by 27.2% during the same period.
Americans ranked inflation and prices as their most important issues in the latest Economist/YouGov poll, which included a representative sample of about 1,600 adult US citizens. This comes ahead of other topics that have emerged on the campaign trail, including immigration, climate change and health care.
Promising to tackle higher daily costs is a safe campaign issue at a contentious time, Kate Lamberton, a marketing professor at the University of Pennsylvania’s Wharton School of Business, said.
“There’s nothing we can agree on, right? But we can agree on this,” she said.
Making the case for how a policy will affect voters’ lives is often tricky. The same cannot be said for the cost of necessities.
“There’s a very beautiful, simple cause-and-effect relationship between voting for someone and believing that my grocery bill will go down,” she said.
McDonald’s, Walmart face price criticism
Kroger is just the latest high-profile company to be named in political rhetoric surrounding inflation.
In late May, McDonald’s found itself in a tough spot. Some social media posts have criticized the burger giant’s affordability, from an $18 Big Mac meal at a Connecticut location to a chart claiming the chain’s prices have more than doubled in the past five years.
Republicans seized on the controversy and jumped on it McDonald’s menu prices align with Biden’s economic policies to win over inflation-weary voters. The post on X did not criticize McDonald’s for raising prices.
In response to the uproar, McDonald’s U.S. president Joe Erlinger wrote an open letter and released a fact sheet about the chain’s pricing. It’s a big step for the company, which typically addresses rumors or negative news with a succinct statement rather than a 13-paragraph letter from a senior executive.
mcdonalds says Over the past five years, the actual average price of a Big Mac or a 10-piece McNugget has increased by 21% and 28% respectively, which is a significant increase, but much lower than the levels described on social media.
“I fully expect the price at your local McDonald’s to be a discussion and focus in the coming months,” Ehlinger wrote, alluding to the election cycle.
Several senators also blasted Walmart, the nation’s largest grocer by annual revenue, and Kroger, the nation’s largest supermarket operator, for using technology that could lead to higher food prices.
In the letter sent Monday, Warren and Casey said Kroger has been reaping high profits and questioned why electronic shelf labels are needed because they allow for “dynamic pricing,” a practice that is at odds with airlines and Uber Related to significant price increases based on high demand.
“It is outrageous that while families continue to struggle to put food on the table, grocery giants like Kroger continue to introduce surge pricing and other corporate profiteering schemes,” the senators wrote.
Democratic Sen. Sherrod Brown of Ohio, who is running for re-election, sent a similar letter to Walmart in May, expressing concerns about its adoption of shelf labels that could make dynamic pricing a problem. easier.
Casey, Brown and other senators running in competitive races have also criticized snack manufacturers for “retrenchment,” which involves reducing the size of items but charging the same amount.
A Walmart spokesperson said the retailer will not change its “everyday low prices” policy and pointed to some back-to-school deals, including basket of food Children’s lunches are provided for two weeks at approximately $2 per day.
Kroger did not disclose how it will use electronic shelf labels, but the grocer said in a statement that keeping prices low “is fundamental to our strategy.”
“Lower prices attract more loyal customers and help us grow our business,” the company said.
To fend off criticism, companies must better explain why they are increasing costs or renegotiate with suppliers, said Wharton’s Lumberton. They also must do a better job of telling their stories in advertising, she said.
For example, as families prepare for the first day of school, Amazon and Walmart advertise school supplies starting at 25 cents. Amazon has Run TV ads A cheeky message encouraging parents to spend less on their children.
company tendency value
Over the next two weeks, many of the nation’s largest retailers, including Walmart, Home Depot and Target, will report earnings. They may also defend their prices and emphasize the way they create value — following the lead of some restaurants.
For example, regarding ChipotleCEO Brian Niccol on an earnings call in late July Deny the chain has told workers to stock up on taco bowls less often, but said the company will emphasize generosity again. Like McDonald’s, Chipotle has been the target of social media ire — but the focus is on portion size rather than price.
As far as McDonald’s is concerned is extending its $5 value meals in most U.S. markets. Promotions were launched in June and soon After facing criticism on social mediawhich highlights consumers’ perception that its prices are too high.
Other fast-food chains, such as Wendy’s and Taco Bell, have also introduced or reinstated their own $5 value meals. While the main purpose of these deals is to boost sales, they have the added benefit of keeping the brand warm as politicians look for another “greedy inflation” target.
The deals are driven in part by business realities: Consumers have generally spent less at restaurants in recent months.
