Bernie Sanders rips McDonald’s, Starbucks, and Amazon for ‘corporate greed’ as they post huge profits and price hikes
Inflation is making things more expensive for a lot of people. Are companies making it worse?
Bernie Sanders certainly thinks so.
“Maybe — just maybe — we’ve got a corporate greed problem,” Sanders wrote.
By each company’s own account, inflation has caused them to raise their prices in 2022. McDonald’s said in late January that it was forced to raise its menu prices by around 6% because of the higher costs of labor, shipping, and raw beef. The fast food chain cited supply chain issues and higher wage demands as the biggest drivers behind higher prices.
The coffee shop chain also announced at the beginning of February that it would be raising prices soon, its third price increase since October. Overall, restaurants in the quick-service sector raised their prices by 8% over the last year, according to the latest Consumer Price Index data.
Amazon has also been unafraid to raise the prices of its products, bumping up the annual cost of its Prime subscription from $119 to $139 at the beginning of February.
Sanders pointed out that McDonald’s shareholders are enjoying a 59% profit increase relative to last year, a fact revealed by the company in a financial statement at the end of January, along with annual revenue of $23.2 billion.
Starbucks also recorded big profits last year. In its last quarterly earnings report, earlier this month, the company revealed that its profits had gone up 19% relative to January 2021. Amazon also announced a huge jump in profits in February: $14.3 billion, roughly double its $7.2 billion figure from a year earlier.
Last November, Amazon had the most successful Black Friday and Cyber Monday sales in the company’s history, almost three months before raising its Prime subscription prices.
Companies raising prices during inflation may not be exactly ethical, but it is hardly a surprising trend, and there are no legal barriers to them doing it.
Businesses contend that higher costs on their end are forcing them to raise prices to stay profitable, and for some companies, this is certainly true. But in many cases, raising prices for consumers tends to leave lower-income groups further behind.
“Sometimes we talk about inflation like we care about it for its own sake. We really care about inflation because we care about the way it affects people,” Rakeen Mabud, chief economist for the economic activist group Groundwork Collaborative, recently told Fortune’s Megan Leonhardt. “These price hikes are really, really hitting vulnerable people hard.”
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