Corporations caught jacking prices and blaming inflation

Chew Toy McCoy

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Strange that having to raise prices boosts profits. I guess that’s how inflation works.


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lizkat

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Yah I don't have a problem with a grocery store raising prices after paying higher wages locally; that money comes back to the community in large part, and those stores have a skinny margin to begin with.

But the behemoths are another story. If you know how Walmart, for instance, works to entice and then entrap suppliers by first offering them a huge market for their goods but then insisting on keeping the price it pays them low, it's pretty hard to forgive the giant when it jacks up the retail price at its own outlets. I mean Walmart is not even passing on supplier-price increases to consumers, it's refusing to let its suppliers increase those prices to begin with. Walmart is throwing its squeeze-power around like one of those ninja shuriken, since both its suppliers and consumers are getting hit.
 

JayMysteri0

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Yah I don't have a problem with a grocery store raising prices after paying higher wages locally; that money comes back to the community in large part, and those stores have a skinny margin to begin with.

But the behemoths are another story. If you know how Walmart, for instance, works to entice and then entrap suppliers by first offering them a huge market for their goods but then insisting on keeping the price it pays them low, it's pretty hard to forgive the giant when it jacks up the retail price at its own outlets. I mean Walmart is not even passing on supplier-price increases to consumers, it's refusing to let its suppliers increase those prices to begin with. Walmart is throwing its squeeze-power around like one of those ninja shuriken, since both its suppliers and consumers are getting hit.
I remember watching a special on the effects Wal Mart has on some businesses. Where at first the companies see getting into Wal Mart as God send, then come to regret it later.

Steve Dobbins has been bearing the brunt of that switch. He’s president and CEO of Carolina Mills, a 75-year-old North Carolina company that supplies thread, yarn, and textile finishing to apparel makers–half of which supply Wal-Mart. Carolina Mills grew steadily until 2000. But in the past three years, as its customers have gone either overseas or out of business, it has shrunk from 17 factories to 7, and from 2,600 employees to 1,200. Dobbins’s customers have begun to face imported clothing sold so cheaply to Wal-Mart that they could not compete even if they paid their workers nothing.

“People ask, ‘How can it be bad for things to come into the U.S. cheaply? How can it be bad to have a bargain at Wal-Mart?’ Sure, it’s held inflation down, and it’s great to have bargains,” says Dobbins. “But you can’t buy anything if you’re not employed. We are shopping ourselves out of jobs.”

The gallon jar of pickles at Wal-Mart became a devastating success, giving Vlasic strong sales and growth numbers–but slashing its profits by millions of dollars.
 

lizkat

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I remember watching a special on the effects Wal Mart has on some businesses. Where at first the companies see getting into Wal Mart as God send, then come to regret it later.

Indeed. I read Charles Fishman's book The Walmart Effect. I recommend it (and the audiobook version). A real eye opener.
 

JayMysteri0

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SuperMatt

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Yes, this is still very much a thing




Also with this rise in profits in the name of inflation, unionizing is gaining traction which is something even the most 'woke' corporations can't have.

And yet we still get people defending the billionaires. “If you tax their wealth… average people will be next!” Is literally the kind of stupidity put forth by such defenders. Um, wake up. Average people ALREADY pay a higher percentage of their income in taxes than billionaires, by a large margin.

Ron Wyden (Democrat of Oregon) has proposed a way to make sure Billionaires pay tax. Manchin will probably block this, but I think it would be a good start.

 

Herdfan

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I understand being mad about it.

I do not understand being surprised by it. :unsure:
 

Chew Toy McCoy

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Why Joe Biden is afraid to blame Big Business for inflation | Salon.com

As Presidents go, Biden isn’t the most evil or corrupt, but he also is the exact wrong kind of President for the moment. Pick any major issue and it's not the time for bipartisan consensus (with blanket obstructionist Republicans) or propping up the status quo. If he refuses to use executive orders, at the very least he can express more than mild disappointment in Congress enabling the country to circle the toilet bowl.
 

lizkat

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Yah in related piece in Salon, Proctor & Gamble goes on about how there's still room for profit margin increases via price hikes even as their costs are also on the rise. These mega-corporations do seem to count as an upside their ability to keep raising prices over the drag of higher costs of labor, materials or shipping, just because they're selling products that people need.


Last month, Procter & Gamble — which manufactures or distributes a wide range of cleaning and hygiene items as well as food, snacks and beverages — said on Wednesday that the company expects profits to increase into 2022, even as the cost of labor, freight and raw materials continues to rise, according The Wall Street Journal.

"The consumer is very resilient and very focused on these categories of clean home and health and hygiene," P&G finance chief Andre Schulten told the Journal.

I got news for him though (or maybe he knows he' s whistling in the wind): some consumers are very focused on making do with what's on hand when prices on stuff start to soar. Or we pitch in to share the cost of a larger size bag or a bundle when the unit price on smaller buys goes through the roof. When prices on microcloths go up, I cut up old thermal unders instead, when it comes time for spring cleaning.

Maybe the average CEO wouldn't burden himself with that info, but the ones who do understand that are careful not to cannibalize their usual array of products... or at least not to the point of ending up having to underwrite a 10-for-$10 sale to get rid of stuff they couldn't rip us off for by jacking the price to $2.19 per single box.
 

SuperMatt

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Yah in related piece in Salon, Proctor & Gamble goes on about how there's still room for profit margin increases via price hikes even as their costs are also on the rise. These mega-corporations do seem to count as an upside their ability to keep raising prices over the drag of higher costs of labor, materials or shipping, just because they're selling products that people need.




I got news for him though (or maybe he knows he' s whistling in the wind): some consumers are very focused on making do with what's on hand when prices on stuff start to soar. Or we pitch in to share the cost of a larger size bag or a bundle when the unit price on smaller buys goes through the roof. When prices on microcloths go up, I cut up old thermal unders instead, when it comes time for spring cleaning.

Maybe the average CEO wouldn't burden himself with that info, but the ones who do understand that are careful not to cannibalize their usual array of products... or at least not to the point of ending up having to underwrite a 10-for-$10 sale to get rid of stuff they couldn't rip us off for by jacking the price to $2.19 per single box.
If their costs go up $1, they charge $2 extra. Since people are already experiencing inflation, they use this opportunity to make some extra profit. If their costs go down by $1 later, they can reduce their price by $.50... so they make an extra $1.50 per item in the future. It’s all because we have such little competition these days. Allowing mega-corporations is a huge mistake. I wonder if it’s possible for regulators to ever put the genie back in the bottle? Will we ever see a huge company like Bell Telephone ("Ma Bell") broken up in the future?
 

Chew Toy McCoy

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Yah in related piece in Salon, Proctor & Gamble goes on about how there's still room for profit margin increases via price hikes even as their costs are also on the rise. These mega-corporations do seem to count as an upside their ability to keep raising prices over the drag of higher costs of labor, materials or shipping, just because they're selling products that people need.




I got news for him though (or maybe he knows he' s whistling in the wind): some consumers are very focused on making do with what's on hand when prices on stuff start to soar. Or we pitch in to share the cost of a larger size bag or a bundle when the unit price on smaller buys goes through the roof. When prices on microcloths go up, I cut up old thermal unders instead, when it comes time for spring cleaning.

Maybe the average CEO wouldn't burden himself with that info, but the ones who do understand that are careful not to cannibalize their usual array of products... or at least not to the point of ending up having to underwrite a 10-for-$10 sale to get rid of stuff they couldn't rip us off for by jacking the price to $2.19 per single box.

Earnings call after earnings call CEOs are bragging about gouging consumers. Lets pretend for a minute that all this inflation is due to increased wages. It’s not, but lets say it is. What message is that sending out? “You thought you were going to get ahead now? LOL. Fuck you.” And apparently plenty of people on the right are perfectly fine telling Americans they are never going to get ahead. So don’t even think about it. We’ll find a way to take it away from you soon after it hits your bank account.
 

lizkat

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Earnings call after earnings call CEOs are bragging about gouging consumers. Lets pretend for a minute that all this inflation is due to increased wages. It’s not, but lets say it is. What message is that sending out? “You thought you were going to get ahead now? LOL. Fuck you.” And apparently plenty of people on the right are perfectly fine telling Americans they are never going to get ahead. So don’t even think about it. We’ll find a way to take it away from you soon after it hits your bank account.

And let's not forget there are still wage workers who are exempt from the minimum wage laws... agricultural workers and waitstaff at indie diners for example.

Maybe if you now make $16 an hour instead of $12 you can still put food on the table, assuming your employer didn't dock your hours to keep the wage hike impact off their bottom line.

But if you never saw that kind of hike, so you still depend on tips or a local farm labor shortage to put a floor under your situation, the fact that it costs 7% more or 9% more to buy a box of cereal or a cabbage or whatever is not only hitting your family hard but it's happening just as stimulus programs from the peak of covid experience are starting to be withdrawn.

All this not only because of corporate greed but because the dread word "socialism". There's no reason that subsidies couldn't be made temporarily so that wage hikes' positive impact in a local economy can take effect without threatening the supermarket that is paying the higher wages. There's a lag between the time a person gets a raise and the time the money finds its way to local shops in the form of more spending. Maybe the first thing someone with a pay hike does is buy one expensive thing they couldn't afford before, and they don't get it locally. That does happen. Over time though, higher wages are a good thing for a community. But the very idea that a temporary subsidy == a bailout, wow== could even be considered gets a raucous downvote from conservatives... the same conservatives who defend wasteful defense budgets and the so called need to incentivize exploration by megacorporations abroad looking for new mining or petroleum deposits.
 
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