FTC Chair Khan Pushes for Inquiry Into Elevated Grocery Prices

Federal Trade Commission Chair Lina Khan is pushing for an inquiry into the sustained uptick in grocery prices that started during the Covid-19 pandemic and has become a central campaign issue in the presidential election.

A study of grocery prices would “shed light” on why prices and profits at grocery chains “remain so high even as costs appear to have come down,” Khan said in prepared remarks Thursday during a virtual public meeting hosted by the FTC and Department of Justice.

“The FTC has been focused on ensuring that no American faces inflated prices due to illegal business practices,” she said.

Khan will formally ask the agency to begin the inquiry, which requires a commission vote to move forward.

The inquiry would send orders to some large grocery retailers—the agency didn’t name specific stores—seeking information about their sales, costs, and profits across some commonly purchased products.

There is no set date for a vote, FTC spokesman Douglas Farrar said.

Grocery prices have spiked by roughly 25% over the past four years, five percentage points more than consumer prices overall, Bloomberg News reported in March.

An FTC study released that month found that the largest grocery stores gained a competitive advantage over smaller rivals during the pandemic’s supply chain crunch and that some grocers may have used inflation as an opportunity to increase their profits.

Food and beverage retailer revenues in 2021 jumped to more than 6% over total costs, topping a previous peak of 5.6% in 2015, according to the FTC study, which noted that profits continued to rise in 2023. The report stemmed from orders to companies including Walmart Inc., Amazon Inc., and Kroger Co.

Khan’s comments came during the first meeting of the Strike Force on Unfair and Illegal Pricing, an interagency panel the Biden administration launched in March to target business practices that hike consumer prices.

A grocery study would add to the FTC’s investigations of pricing practices throughout the economy.

The agency last week announced an inquiry into companies’ use of personal data, algorithms and artificial intelligence to set individualized prices for the same set of goods or services. As part of the inquiry into what it calls “surveillance pricing,” the agency on July 24 sent subpoenas to eight firms, including Mastercard Inc., JPMorgan Chase & Co., and the consulting giant McKinsey & Co.