Annual US inflation drops to 3-year low
Economist Dr. Mike Walden joins LiveNOW’s Austin Westfall to break down the latest Consumer Price Index report, which shows that annual inflation has fallen to a three-year low.
The grocery store industry is facing accusations levied by some politicians that stores are engaging in price gouging as consumers continue to grapple with stubborn inflation, but the leader of a trade group representing independent grocers is pushing back on those claims.
FOX Business Network’s Edward Lawrence spoke with Greg Ferrara, president and CEO of the National Grocers Association, who explained that grocers’ net profit margins are being squeezed by higher labor costs and inflationary pressures that ripple through the supply chain.
“Our members are not publicly traded companies, but in 2023, our members realized a net profit margin of 1.4%, so they are making very little margin at a time when they’re dealing with inflationary pressures or dealing with increased labor costs,” Ferrara said.
He explained that “labor is a huge component” of high prices hitting consumers and added: “We’ve seen significant wage increases since before the pandemic, but we’ve also seen enormous increases in commodity prices and while those have come down a bit, they are absolutely elevated.”
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“These are tough times for supermarkets right now. They are doing everything they can to keep prices low, to make sure they’re having aggressive sales to help consumers because they know people in the marketplace are pinched, and they’re feeling that economic pressure and they want to support them,” Ferrara said.
Greg Ferrara of the National Grocers Association pushed back on allegations that grocery stores are engaging in price gouging. (Credit: Scott Olson/Getty Images)
Ferrara also discussed some of the blowback that independent grocery stores have experienced in the wake of the allegations of price gouging by grocers that have been made by Vice President Kamala Harris and Sen. Elizabeth Warren, D-Mass., among others.
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“I think rhetoric matters, and I think all elected officials and all politicians really need to be conscious of what they are saying because what we’re, unfortunately, seeing at some grocery stores is we have people from the public that are calling in screaming and using vulgar language with employees, accusing them of gouging, accusing them of stealing from them, which of course is not what is happening,” he said.
What causes inflation?
There are three factors that could lead to inflation which include demand-pull inflation, cost-push inflation and built-in inflation.
“These are community stores. These are people who live in these communities. And for them to face that kind of backlash and abuse is irresponsible,” Ferrara said. “I think it’s really important for our elected officials, and we have said this, to remember what you’re saying and make sure you’re backed up by fact. And unfortunately, what has been said recently is not backed up by fact.”
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