Watchdog: Will Corporate Greed Get All Due Credit For Higher Prices?

Washington, D.C. — Ahead of the Labor Department’s monthly report on the state of the consumer price index, Accountable.US spotlighted how corporations among the industries measured in the report, including McDonald’s, Kroger, ExxonMobil, and more, are boasting of healthy balance sheets and profits yet failing to pass their success onto consumers with lower prices. The analysis found that these five businesses reported over $12 billion in third quarter profits as they hiked prices on consumers, or planned to do so.  

“Many corporations are bragging of high profits to their investors yet claim they have no choice but to hike prices on consumers. Nothing is stopping many companies from passing their success onto their customers, but for greed – and Republicans in Congress continue to give them a free pass,” said Kyle Herrig, president of Accountable.US. “Congressional Republicans are trying to make matters worse by holding up the Build Back Better Act that would address supply chain challenges and cut costs for everyday families on everything from healthcare, to utilities, to education. When it comes to inflation, the buck stops with obstructionists in Congress and their profit-hoarding corporate donors.”  

In November, Accountable.US released an analysis identifying 12 major corporations that have reported nearly $11 billion in profits the same quarter they announced price increases, along with over $34 billion in stock buybacks and dividends this year. The Biden administration has also been rightly criticizing the meat industry’s “‘pandemic profiteering,’” which has driven half of food price hikes as millions of Americans are struggling against a worsening hunger crisis.  

KEY POINTS FROM THE RESEARCH:  

• Grocery chain Kroger’s Chairman and CEO said the company is “‘in a position of strength‘” as the company reported a Q3 2021 operating profit of $868 million and spent  $297 million on quarterly stock buybacks just months after it said it was “‘passing along higher cost to the customer.'”
   
• Oil and gas conglomerate ExxonMobil reported “excellent third-quarter results,” with $6.8 billion in earnings, a newly-announced $10 billion stock buyback program, and $3.72 billion in quarterly shareholder dividends—all after the company projected massive profits from rising fuel prices.
   
• Fast food giant McDonald’s reported a $2.15 billion profit that “topped analysts’ estimates” due in part to price hikes in Q3 2021—while the company increased its shareholder dividend by 7%, was expected to pay over $1 billion in dividends in Q4 2021, and resumed stock buybacks worth over $14 billion.
   
• Vehicle giant Ford Motor Company posted a $1.8 billion profit in its Q3 2021, noted that financial performance was “sharply higher” than in Q2 2021, and ended the quarter with $31.5 billion in cash—all just months after it profited from “surging prices” on scarce vehicle models.
   
• NextEra Energy, one of the largest electric utility companies in the country, reported “strong” financial results in its Q3 2021, with $447 million in profits—meanwhile, NextEra has paid $2.27 billion in shareholder dividends so far in 2021 as a subsidiary planned on raising rates on millions of residential customers. 

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