The Federal Trade Commission (FTC) released a report examining the origins of grocery supply chain disturbances triggered by the COVID-19 pandemic.
The report revealed that large grocery chains and suppliers profited, while consumers bore the brunt of the disruptions. The report reveals a notable surge and sustained elevation in grocery retailer profits, with revenues exceeding 6% over total costs in 2021, casting doubt on claims attributing rising grocery prices solely to increased retailer expenses. According to the FTC, retailer profits rose even more, with revenue reaching 7% over total costs in the first three quarters of 2023.
Additionally, larger purchasers, particularly during the pandemic’s peak, enforced stringent delivery conditions on suppliers, leveraging fines for noncompliance to secure preferential treatment and altering supplier allocations.
According to the report, supply chain disruptions didn’t affect all retailers, wholesalers or producers equally. Smaller businesses, notably smaller grocery retailers, encountered greater challenges in sourcing products than their larger counterparts.
