WASHINGTON DC – Government watchdog Accountable.US released a major analysis of earnings data of the top three corporations in several major categories under the Labor U.S. Department’s Consumer Price Index (CPI)’s — including food, energy, commodities, health care and shelter – showing that big businesses are using higher prices not to just cover their own expenses, but to line their shareholders pockets on the backs of hardworking consumers. Accountable.US found these companies all raised prices on consumer staples and/or benefited from increased costs while making $151 billion in increased profits from their last reported earnings periods.
Adding insult to injury, these same companies increased spending on shareholder handouts like stock buybacks and dividends by 25%, totaling over $140.6 billion – raising serious questions about whether industry price hikes correspond with their own added costs during the pandemic given the staggering level of profit they are enjoying and their extreme generosity to shareholders. The findings come as President Biden vows to fight inflation and combat corporate profiteering in an effort to help struggling Americans.
Across nearly every single industry that is measured for price changes, we’re seeing highly profitable corporations demand more money for consumer staples that families depend on without a good reason why. These companies would have consumers believe they marked up prices just to keep up with outside costs, but the tens of billions in extra profits and generous giveaways to investors last year show otherwise. It simply doesn’t add up. Despite what they claim, these highly profitable businesses do have a choice, and they’re choosing to fatten their bottom line rather than keep consumer prices stable.
Accountable.US president Kyle Herrig
Added Herrig: “It’s frightening to think how many CEOs are asking themselves, “If that company is getting away with profiteering during a pandemic, why can’t we?” It’s all the reason Congress needs to act now on President Biden’s agenda to crack down on industry overcharging, straighten out the supply chain, and ensure greedy corporations finally pay their fair share in taxes.”
The report follows Accountable.US’ previous research on how clear pandemic profiteering from the big shipping, trucking and railroad companies are making inflation/supply chain problems worse for everyday consumers.
KEY FINDINGS FROM ACCOUNTABLE.US:
- Food At Home: As grocery prices increased 6.5%, the country’s largest grocery chains—Walmart,Kroger, and Costco—benefited from price increases while seeing their fiscal year net incomes increase by a total of $238 million while increasing stock buybacks and dividends by over $12 billion.
- Food Away From Home: As prices increased 6%, two of the biggest U.S. food chains—McDonald’sand YUM! Brands—saw profits increase by over $3.4 billion in FY 2021 while boosting shareholder handouts by over $1.48 billion. Meanwhile, Starbucks, the second-biggest restaurant chain, saw its FY 2021 profits increase by nearly $3.2 billion.
- Gasoline: As gasoline prices increased 49.6% in 2021, the three biggest U.S. oil companies—ExxonMobil, Chevron, and Marathon Petroleum—benefited from higher prices, seeing previously negative profits jump nearly $87.5 billion while boosting shareholder handouts by over $4.5 billion in FY 2021.
- Utility Gas & Electricity: As gas and electric utility prices climbed 24.1% and 6.3% respectively, the three biggest U.S. gas and electric companies—Exelon, Duke, and Southern Company—all benefited from higher rates, with profits climbing by $1.64 billion while spending $7.3 billion on shareholder handouts in FY 2021.
- New Vehicles: As new vehicle prices increased nearly 12%, the two top–selling U.S. automakers—General Motors and Ford—saw profits climb at least $22.7 billion and spent nearly $586 million on shareholder handouts in 2021. Meanwhile, Toyota, the top-selling U.S. automaker recently reported quarterly earnings nearly $7 billion higher than the previous year.
- Used Vehicles: While used vehicle prices climbed 37.3%, the biggest used car dealers—CarMax,Carvana, and AutoNation—saw profits climb by over $1.4 billion while shareholder handouts increased by over $2.2 billion in 2021.
- Apparel: While apparel prices climbed 5.8%, the biggest clothing companies—TJX, Nike, and Gap—saw profits climb by over $4.5 billion while boosting shareholder handouts by over $5 billion in 2021.
- Medical Commodities: While medical care prices increased 2.2%, the biggest drugmakers—Johnson & Johnson, Pfizer, and AbbVie—saw profits jump by over 90% to $54 billion while boosting shareholder handouts by nearly $2.6 billion in 2021.
- Medical Services: While medical care prices climbed 2.2%, the biggest healthcare companies—CVS,UnitedHealth, and Cigna—benefited from increased consumer costs as they saw profits of nearly $31 billion while boosting shareholder handouts by over $2 billion in 2021.
- Shelter: While shelter prices increased 4.1%, the biggest apartment companies—Mid-America Apartment Communities, Starwood Property Trust, and AvalonBay—touted rent hikes as they saw profits climb $588 million while increasing shareholder dividends by $24.4 million in 2021.