Major US Retailers Accused of Profiteering, Raising Consumer Prices Amid Soaring Inflation

People shop at a grocery store in Monterey Park, Calif., on April 12, 2022. FREDERIC J. BROWN/AFP via Getty Images

Some of the United States’ biggest retailers have been accused by a nonpartisan watchdog organization of profiteering from rising inflation levels across the nation.

In the new report (pdf) by Accountable.US, companies including Costco Wholesale Corp., Walmart Inc., Target Corp., CVS Health Corp., Kroger Co., and T.J. Maxx parent company TJX Companies Inc. are among those accused of utilizing increasing inflation rates to slap higher prices on their products, while simultaneously seeing near-record margins in 2021.

The report states that the companies made “at least $24.6 billion in increased profits during their most recent fiscal years,” as Americans continued to face the economic impacts of the COVID-19 pandemic.

Accountable.US said it studied the financial statements of the nation’s top 10 retailers over the past two years—which also include Amazon.com Inc., Home Depot Inc., Lowe’s Companies Inc., and Dollar General Inc.—and found that the companies collectively increased profits by billions during the most recent fiscal years, for a total of $99 billion.

“And even worse, these same companies increased spending on shareholder handouts by nearly $45 billion year-over-year for a total of $79.1 billion,” the watchdog organization said.

The organization cited Amazon.com Inc., which recently announced price increases to its Prime subscriptions and a $10 billion stock buyback program to replace the previous $5 billion stock repurchase authorized by Amazon’s board in 2016.

Trading based on the new share price will begin on June 6.

The e-commerce company “saw its 2021 net income increase by over $12 billion to over $33 billion as its CEO pay ratio increased from 58-to-1 to 6,474-to-1,” Accountable.US said.

Elsewhere, Walmart, which Accountable.US said has “credited ‘price management and mix’ for an increase in its gross profit rate,” saw its full-year earnings increase by $163 million to over $13.6 billion, “while its shareholder handouts grew by $7.2 billion to nearly $16 billion in FY 2022, with plans to spend at least $10 billion on stock buybacks in FY 2023.”

The report also singled out Costco’s chief financial officer Richard Galanti, who said in May 2021 that “some of [inflation] has passed through” onto customers, CNBC reported. Consumer prices at Costco rose between 4.5 to 5 percent in the first quarter of fiscal 2022, according to Forbes.

Costco, Accountable.US said, has “touted its ’record-breaking' $5 billion net income, grew its shareholder handouts by over $4.5 billion to over $6.2 billion and has continued to see increases to its net income after earning $1.2 billion in net income in its most recent Q2 FY 2022, up $348 million from the prior year.”

“When corporate profits are at their highest levels in nearly 50 years and companies are showering their shareholders with billions in new benefits over the last year, it raises serious questions whether industries like retail have had to hike prices on families to such excessive degrees,” Accountable.US President Kyle Herrig said in a statement to CBS MoneyWatch.

The Epoch Times has contacted Amazon, Costco, Walmart, Target, CVS Health, Kroger, Lowe’s, TJX, Home Depot, and Dollar General for comment.

In a statement to The Epoch Times, Home Depot said the Accountable.US report misrepresents the company’s comments about fiscal 2021 to make inaccurate allegations.

“As our customers’ advocate for value, we’re continuously working with our suppliers to keep costs as low as possible for our customers,” the company said. “We don’t control costs in core commodities like lumber, copper and wiring. Our growth has been driven by overwhelming demand in home improvement.”

The report comes as inflation levels across the United States have reached their highest in 40 years, with the latest Bureau of Labor Statistics (BLS) data showing that consumer prices had risen by 8.5 percent in March from a year earlier—the largest 12-month increase since December 1981.

The BLS also reported that the unadjusted producer price index (PPI) in March 2022 had increased 11.2 percent from March 2021. The PPI is a measure of inflation based on the costs to producers.

In its annual forecast in March 2022, the National Retail Federation said it predicts retail profits will grow between 6 and 8 percent to more than $4.86 trillion in 2022.

“It’s time corporations finally help shoulder the burden average Americans have taken on throughout the health crisis,” Herrig told CBS MoneyWatch. “Corporations can start by stabilizing prices for consumers instead of pursuing even higher profits—on top of finally paying their fair share in taxes.”