Food is more expensive – are US corporate profits to blame?

As inflation peaked in mid-2022, many U.S. food corporations, including Chipotle and McDonald's, raised prices significantly, leading to substantial profit increases. Chipotle's profits surged by 110% as it maintained high prices despite falling costs. An analysis of 36 major food companies revealed that while consumers faced rising prices, corporate profits rose by a median of 51% since before the pandemic, with restaurants seeing a median profit increase of 72% in the last two years. Executives from various companies acknowledged that they were exploiting inflationary conditions to raise prices beyond necessary levels, a practice referred to as "profiteering." Despite some costs decreasing, many companies have not lowered their prices, indicating a shift to a "new normal" of elevated food prices. The average American worker's wages have only increased by 5% since inflation peaked, leading to a significant disparity where food price increases outpace wage gains, particularly affecting low-income individuals. The analysis also highlighted that companies are increasingly using strategies like shrinkflation—reducing product sizes without lowering prices—to maintain profit margins. This situation has raised concerns about food insecurity, especially among the most vulnerable populations, as corporate profits continue to grow while consumer purchasing power diminishes.

- Many U.S. food corporations have significantly increased prices, leading to record profits.

- Corporate profits rose by a median of 51% since before the pandemic, with restaurants seeing a 72% increase.

- Executives admit to exploiting inflationary conditions to raise prices beyond necessary levels.

- Food price increases are outpacing wage gains, particularly affecting low-income individuals.

- Companies are using shrinkflation strategies to maintain profit margins without lowering prices.