Several major food producers — including Sysco, Kellogg’s, Starbucks and Chipotle — have raised consumer prices while posting record revenues, huge profits and billions in shareholder handouts, according to a new analysis by a government watchdog group.
The report comes as the U.S. House considers President Biden’s widely popular Inflation Reduction Act that would lower costs for families and seniors by reducing the deficit and ensuring greedy corporations pay their fair share in taxes.
Recent polling shows four in five Americans believe corporations being greedy and raising prices to make record profits is a cause of inflation, including a majority of Americans that believe it is a “major cause.”
The analysis is the latest in a series from Accountable.US documenting how blatant pandemic profiteering and corporate greed — including from the big meatpacking, shipping, retail, clothing, food, trucking and railroad companies — are making inflation and supply chain problems worse for everyday consumers.
Billion-dollar industries are compounding the problem by rewarding those in Congress that obstruct common sense measures to curb corporate greed, lower costs for families, and ensure tax fairness — no matter how widely the public supports the initiatives.
According to Liz Zelnick, spokesperson for Accountable.US:
“Big food has been among the most opportunistic industries during the economic recovery, marking up prices again and again on families well beyond any new outside cost of doing business. The industry’s eye-popping earnings reports tell the real story.
“The same corporations that trumpet massive new profits and giveaways to their wealthy investors suggest they somehow had no choice but to inflate prices so high. Their CEOs did have a choice, and they chose greed.
“The food industry’s hunger for record high profits has come at the unreasonable expense of everyday families. It’s another reason why Congress must finish the job on the Inflation Reduction Act that curbs costs and ensures profiteering corporations finally pay their fair share.”
Key findings from the report:
- Sysco — Which passed along 13.4% in increased costs to its customers in November 2021 — recently reported a 237.5% increase In quarterly earnings and a 159% increase in yearly earnings as the company spent $1.5 Billion on shareholder handouts compared to just $608.7 Million in net capital expenditures for the year.
- The Kellogg Company — Which has been raising prices since the second half of 2020 — recently raised its forecast for full-year earnings after its net sales increased to over $3.8 Billion and the cereal giant spent $300 Million on stock buybacks and an additional $394 Million on shareholder dividends in the first half of 2022.
- Starbucks — Whose interim CEO Howard Schultz touted its “pricing power” and ability to raise prices by 5% year over year on its customers — saw record quarterly revenues of nearly $8.2 Billion as the coffee giant spent over $4 Billion on stock buybacks and an additional $1.7 Billion on shareholder dividends during the first three quarters of its fiscal year 2022.
- Kraft Heinz — Which has raised prices by nearly 14% since 2019 — saw its 2022 second-quarter net income jump drastically by 1,136% to $265 Million — as the food giant spent $980 Million on shareholder dividends in the first six months of 2022 alone.
- Chipotle — Which announced additional price increases planned for August after previously raising prices on consumers — recently announced a 38.2% increase in second-quarter net income as well as increases in company and store-level operating margins, allowing the company to spend $261.1 Million on stock buybacks and approve an additional $300 Million in future buybacks.