Experts Find Corporate Price Gouging Fuels High Costs, InflationWhile struggling families and small businesses feel the pain from price hikes, major corporations across a wide variety of industries, from Starbucks to meat-processing giant Purdue, aren’t just offsetting rising costs — they’re reaping record profits.
By Main Street Sentinel Staff
Starbucks will increase prices this year, the company announced last month, blaming rising labor costs and disruptions to their supply chain. But a look at the company’s balance sheet tells a different story: In the last three months of 2021, Starbucks has already raised their prices twice – and seen their profits rise too, up 31 percent to $816 million.
Starbucks was far from the only corporation to blame rising costs while reaping record profits: fast food prices rose 8 percent, the greatest increase in two decades. Across industries, major companies, from soft drink titans Coca-Cola and Pepsi to meat-processing market leaders Purdue and JBS have raised prices, claiming rising costs have forced their hands.
As rising inflation continues to dominate headlines, a growing number of economists agree that powerful corporations like Starbucks are contributing to the problem, using their pricing power to gouge customers, placing a financial burden on small business owners and working families while netting record profits for shareholders.
Experts worry that inflation woes could persist if corporate price gouging goes unchecked.
“The longer inflation lasts, said Jeffrey Meli, global head of research at Barclays Plc, “the more widespread it is, the more air cover it gives companies to raise prices. It feeds on itself.”