Sen. Looney, Sen. Duff, and AG Tong Target Grocery Store Profits

Today, Senate President Pro Tempore Martin Looney (D-New Haven), Senate Majority Leader Bob Duff (D-Norwalk), and Attorney General William Tong announced the Office of the Attorney General will be sending letters of inquiry to all major grocery retailers to disclose their profits and costs. The action follows a recent Federal Trade Commission (FTC) investigation showing grocery store profits have spiked since the pandemic.

The FTC released a report regarding a study of the effect of the COVID-19 pandemic on grocery prices and supply chain issues. Although the study did not look at the cause of the increase in prices of groceries, the FTC notes in its report that publicly available data suggests that the increase in grocery prices is due to stores increasing revenue, not inflation.

Specifically, the report states that during the pandemic, profits rose substantially and have remained elevated. For example, food and beverage retailer revenues increased to more than 6 percent over total costs in 2021, higher than their most recent peak, in 2015, of 5.6 percent. In the first three-quarters of 2023, despite the end of the pandemic, retailer profits rose even more, with revenue reaching 7 percent over total costs. This data casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs due to inflation. The FTC concluded that additional study on this issue must be conducted.

“When grocery prices go up, it’s not just a dent in the wallet, it’s an attack on the most vulnerable,” said Senate President Martin Looney. “We need to peel back the layers of these price hikes. Are rising costs truly unavoidable, or are grocery store profits quietly expanding while families struggle to put healthy food on the table? We deserve answers, and a deep dive into profit margins might just reveal where savings for our communities can be found.”

“If you also leave the grocery store shocked by the amount on the receipt, you are not alone, and it is not in your head. A recent study by the FTC shows that grocery store profits are higher than pre-pandemic levels,” said Senate Majority Leader Bob Duff. “That is why today we are working with Attorney General Tong to send a letter of inquiry to all major grocery retailers to learn whether the increase in grocery prices is due to inflation or profit. I will not stand idly by while corporate greed manipulates the public for their own profit.”

“Rising costs on grocery staples are hitting all Connecticut families hard. And to think that the potential reason for them could be outsized and excessive profits rather than ordinary market fluctuations is infuriating,” said Attorney General Tong. “That’s why my Office will be requesting detailed information from these stores about their costs and what they are charging consumers. If we find evidence that the law has been violated, my office is prepared to take strong and swift action to protect Connecticut consumers.”