Grocery Chain With 100+ Michigan Locations Admits to Price Gouging on Staples

You may have had suspicions that the price of staple grocery items has been artificially inflated, especially during the last four years. But now we're learning that one major grocery chain has admitted to price-gouging customers on items like milk and eggs.

Antitrust Hearing Includes Damning Testimony

As officials with Kroger and Albertsons continue their attempt to hammer out a merger deal, a top executive with Kroger testified before the Federal Trade Commission on Tuesday (8/27) that the grocery chain had raised the price on eggs and milk beyond inflation levels.

Andy Groff is Kroger's Senior Director for Pricing. Groff admitted that Kroger intends to "pass through our inflation to consumers" in an internal email obtained by the FTC.

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"On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff said in the internal email to other Kroger executives, as reported by Newsweek.

Kroger's Rebuttal of Price Gouging Claim

A spokesperson for the Cincinnati-based retailer tells Bloomberg that Groff's admission was "cherry-picked" and "does not reflect Kroger's decades-long business model to lower prices for customers by reducing its margins."

Kroger Scrutinized for Possible Surge Pricing Model

News that the country's biggest grocery chain admitted to price gouging since the pandemic comes after Kroger has been heavily scrutinized for possibly employing a surge-pricing modality. 

Surge pricing is a tactic used by airlines, hotels, Uber, and others to raise and lower prices based on demand. Its use in grocery stores is, however, considered controversial because food is an essential product.

In recent years, Kroger has expanded its use of electronic shelf tags which allows prices to be changed quickly and efficiently. However, there is growing concern that retailers who use electronic price tags may take advantage of the technology in order to raise the price of groceries during peak times.

Kroger in Michigan

Kroger is the largest supermarket chain in the United States with about 1,320 locations. In Michigan, Kroger operates about 120 stores in 82 cities, according to its website.