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There is a reason corporate price gouging takes place when you see inflation narrative in the media. This is the only opportunity where people accept an increas

There is a reason corporate price gouging takes place when you see inflation narrative in the media. This is the only opportunity where people accept an increase in prices that sticks around. You raise the prices of eggs on a normal day, people will stop buying your eggs. You raise the prices of eggs when everyone is talking about inflation, people will accept it and focus on everything else.

HDThoreaun 3y ago
Completely disagree. Eggs are a largely demand inelastic good. Prices go up when supply goes down, that's it. Commodity markets are very competitive, but when prices increase most people just get angry and pay anyway, it has nothing to do with media narratives.
- Sohcahtoa82 3y ago
  I don't think the GP comment meant eggs specifically. They just chose a random specific consumer good as an example.
  - HDThoreaun 3y ago
    Neither did I. People aren't deciding what to buy based off the media's inflation narrative. They're trying to make the best decisions for themselves given the opportunities available. If that means buying expensive eggs they'll do it.
- 303uru 3y ago
  Lol, you're the one who narrowed price gouging across nearly the entire marketplace to EGGS!!!!
blitzar 3y ago
Auto workers seem to have used the "narrative" to good effect.
adventured 3y ago
Can you provide several strong examples of corporate price gouging showing up in public financial results (where we can see some evidence of it, instead of just empty claims)? I've yet to see any proof of it. Margins haven't skyrocketed on food products for example. Kroger still has horrible retailer margins. Prices at CVS and Walgreens have soared, their business margins are still horrible in retail. Kroger's gross profit barely moved over the three operating years during the inflation wave. Their sales increased by 12% across three years combined. Which is another way of saying in real terms their business shrank over three years. Their gross profit margin was 23% in 2021, and it's 22% now. They're one of the giant primary grocery stores in the US, if there was money to be made from price gouging consumers on the grocery price spike, where are the results? Walmart's gross profit margin for 2020 was 24%. It's 24% for the last four quarters. Their operating income margin in 2020 was 3.9%, and it was 3.4% for the last four quarters. Where's the big spike in profitability? The greatest operating retailer in history, with enormous leverage over vendors, if they can't take advantage of a supposed price gouging bonanza, who can? Their operating costs are going up faster than sales. Hershey, like a lot of candy makers, has raised prices by a lot during the inflation wave. Seemingly well beyond the rate of inflation. And yet both their gross and operating income margins have barely moved. Their operating income margin was 22% in 2020, and it's 23% for the last four quarters. They raised prices by 30-50% in stores, so why didn't their profitability margins soar? Their costs went up a lot. Their sales went up by 40% from fiscal 2019 to the latest rolling four quarters, their cost of revenue went up by 41%. Kraft Heinz has raised prices like everybody else and has barely seen any sales increase since 2020. So they're another contracting business. Their gross profit declined while their sales slightly went up over that time, so their margins are getting worse and their costs of operating are going up. Their operating income has dropped. Mondelez has raised prices like everybody else. Their gross profit margin in 2019 was 40%, and in the last four quarters it was 38%. Their operating income margin was 15% in 2019, and it's 15% for the last four quarters. Is it the oil companies? Oil is $80. That's ~$62 in 2013 dollars. Clearly not the problem. How many examples do you want? Where's the corporate price gouging showing up in fact? All I keep seeing is empty blame being cast without a lot of proof to go with it, despite the fact that we have access to vast amounts of public corporate financial information related to sales and profitability. It's a blame the corporations propaganda device, because the alternative is to face the music as it pertains to the consequences of magic free money being endlessly 'printed' and pumped into the system by the trillions of dollars to keep everything propped up (the inflation consequence is damaging to Keynesian economics in terms of reputation). The mainstream narrative for example about Japan has been deflation, deflation, deflation. Back in reality their currency has been hammered by intentional debasement (to try to deal with their drowning-in-debt problem) and their standard of living has imploded along with it. The direct consequences of their grand Keynesian experiment in gigantic state spending. While all the propaganda was targeted on deflation, they were inflating their currency by a lot and eroding the standard of living of their people.
Aunche 3y ago
This narrative assumes that everyone is a mindless robot who believes everything that they're told. There is some degree of truth to this, but for the most part, prices are set by supply and demand. Egg prices rose because the avian flu killed off a significant percentage of chickens. They have since fallen back now to normal. The same thing happens to gas. https://fred.stlouisfed.org/series/APU0000708111 https://fred.stlouisfed.org/series/APU0000708111

HDThoreaun 3y ago

Completely disagree. Eggs are a largely demand inelastic good. Prices go up when supply goes down, that's it. Commodity markets are very competitive, but when prices increase most people just get angry and pay anyway, it has nothing to do with media narratives.

Sohcahtoa82 3y ago
I don't think the GP comment meant eggs specifically. They just chose a random specific consumer good as an example.
- HDThoreaun 3y ago
  Neither did I. People aren't deciding what to buy based off the media's inflation narrative. They're trying to make the best decisions for themselves given the opportunities available. If that means buying expensive eggs they'll do it.
303uru 3y ago
Lol, you're the one who narrowed price gouging across nearly the entire marketplace to EGGS!!!!

blitzar 3y ago

Auto workers seem to have used the "narrative" to good effect.

adventured 3y ago

Can you provide several strong examples of corporate price gouging showing up in public financial results (where we can see some evidence of it, instead of just empty claims)? I've yet to see any proof of it. Margins haven't skyrocketed on food products for example. Kroger still has horrible retailer margins. Prices at CVS and Walgreens have soared, their business margins are still horrible in retail. Kroger's gross profit barely moved over the three operating years during the inflation wave. Their sales increased by 12% across three years combined. Which is another way of saying in real terms their business shrank over three years. Their gross profit margin was 23% in 2021, and it's 22% now. They're one of the giant primary grocery stores in the US, if there was money to be made from price gouging consumers on the grocery price spike, where are the results? Walmart's gross profit margin for 2020 was 24%. It's 24% for the last four quarters. Their operating income margin in 2020 was 3.9%, and it was 3.4% for the last four quarters. Where's the big spike in profitability? The greatest operating retailer in history, with enormous leverage over vendors, if they can't take advantage of a supposed price gouging bonanza, who can? Their operating costs are going up faster than sales. Hershey, like a lot of candy makers, has raised prices by a lot during the inflation wave. Seemingly well beyond the rate of inflation. And yet both their gross and operating income margins have barely moved. Their operating income margin was 22% in 2020, and it's 23% for the last four quarters. They raised prices by 30-50% in stores, so why didn't their profitability margins soar? Their costs went up a lot. Their sales went up by 40% from fiscal 2019 to the latest rolling four quarters, their cost of revenue went up by 41%. Kraft Heinz has raised prices like everybody else and has barely seen any sales increase since 2020. So they're another contracting business. Their gross profit declined while their sales slightly went up over that time, so their margins are getting worse and their costs of operating are going up. Their operating income has dropped. Mondelez has raised prices like everybody else. Their gross profit margin in 2019 was 40%, and in the last four quarters it was 38%. Their operating income margin was 15% in 2019, and it's 15% for the last four quarters. Is it the oil companies? Oil is $80. That's ~$62 in 2013 dollars. Clearly not the problem. How many examples do you want? Where's the corporate price gouging showing up in fact? All I keep seeing is empty blame being cast without a lot of proof to go with it, despite the fact that we have access to vast amounts of public corporate financial information related to sales and profitability. It's a blame the corporations propaganda device, because the alternative is to face the music as it pertains to the consequences of magic free money being endlessly 'printed' and pumped into the system by the trillions of dollars to keep everything propped up (the inflation consequence is damaging to Keynesian economics in terms of reputation). The mainstream narrative for example about Japan has been deflation, deflation, deflation. Back in reality their currency has been hammered by intentional debasement (to try to deal with their drowning-in-debt problem) and their standard of living has imploded along with it. The direct consequences of their grand Keynesian experiment in gigantic state spending. While all the propaganda was targeted on deflation, they were inflating their currency by a lot and eroding the standard of living of their people.

Aunche 3y ago

This narrative assumes that everyone is a mindless robot who believes everything that they're told. There is some degree of truth to this, but for the most part, prices are set by supply and demand. Egg prices rose because the avian flu killed off a significant percentage of chickens. They have since fallen back now to normal. The same thing happens to gas. https://fred.stlouisfed.org/series/APU0000708111 https://fred.stlouisfed.org/series/APU0000708111