Soaring credit card swipe fees and fuel prices are to blame for today’s higher grocery prices, Kroger CEO Rodney McMullen said in court on Wednesday.
Kroger and its rival Albertsons are currently battling a lawsuit from the FTC. The regulator is looking to block the proposed $24.6 billion merger between the two supermarket giants over antitrust concerns.
The case, which is being heard in Portland, Oregon, is set to be decided at the end of September.
McMullen was testifying on Wednesday when his company lawyer asked him why grocery prices have gone up.
In his response, McMullen blamed rising operating and supplier costs for the price increases, Reuters reported on Wednesday.
But Kroger, he said, wouldn’t be raising prices if its merger with Albertsons went through.
“We believe over time, value will be increasingly important and you can’t price your items above the market,” McMullen said in court on Wednesday, per Reuters.
McMullen’s comments come just a week after an FTC attorney had questioned a top Kroger executive about an internal email he sent about Kroger’s milk and egg prices.
“On milk and eggs, retail inflation has been significantly higher than cost inflation,” Kroger’s senior director for pricing, Andy Groff, wrote to his bosses in March, Bloomberg reported.
When asked about the email, Groff testified that Kroger’s objective was to “pass through our inflation to consumers,” per Bloomberg.
“This cherry-picked email covers a specific period and does not reflect Kroger’s decades-long business model to lower prices for customers by reducing its margins,” a spokesperson for Kroger told Business Insider’s Natalie Musumeci in a statement last week.
The growing furor over high grocery prices has drawn the attention of both presidential nominees, who are looking to entice voters with their economic policies.
Last month, Vice President Kamala Harris announced a proposal for the first-ever federal ban on price gouging for groceries and food.
The proposal drew mixed reactions from some business executives and economists, who said they thought the plan was an instance of government overreach.
Former President Donald Trump said in a press conference last month that he could reduce the cost of living by lowering energy prices.
“So when I win, I will immediately bring prices down, starting on day one. We will end Kamala’s war on American energy, and we will drill baby drill. We’re going to drill baby drill. That’s going to bring down prices of everything, because energy brought it up,” Trump said.
Some experts, however, say that Trump likely won’t be able to deliver on that promise.
“It’s mostly just bluster, because the president actually doesn’t have any direct control,” Michael Webber, a professor of energy resources at the University of Texas at Austin, said of Trump’s proposal in an interview with The Wall Street Journal.
Representatives for Kroger didn’t immediately respond to a request for comment from Business Insider sent outside regular business hours.
Read the full article here
