Supermarket Price Gouging Investigation Launched in CT, Will New York Join?

Grocery prices have reached record highs and some lawmakers have had enough.

Connecticut officials are officially looking into why grocery stores are continually raising their prices despite cooling inflation.

Upon learning supermarket profits reached a 70-year-high, CT Attorney General William Tong launched an inquiry into what is causing these skyrocketing food and grocery prices. He, along with other Connecticut lawmakers, have expressed concern these price hikes are fueled by greed.

What The Inquiry Means

This investigation encompasses all large and small grocers in the state of Connecticut, and that is raising questions if other states could potentially join in or start their own.

The investigation hopes to uncover why food and groceries are priced the way they are.  Said Tong, per a report from Supermarketnews.com, the inquiry will continue until lawmakers "have an understanding of this market."

Tong personally zeroed in on the rising costs of eggs and almonds. "The price is always going up," he said, which he said "impacts everyone."

Read More: Egg Prices on the Rise Again in New York

Connecticut State Senate Majority Leader Bob Duff was first to raise alarm after seeing a report that price gouging is 50% responsible for inflation. "I have no problem about profits, but it’s the greed," Duff said.

According to a recent report from the U.S. Department of Agriculture, food prices rose by 25% between 2019 and 2023.

Following that, the Federal Trade Commission deduced that supermarket chains took advantage of pandemic-era disruptions to line their own pockets.

While CT's investigation continues, New Yorkers are wondering if the Empire State will also look into the matter.

NY Already Reacting to Predatory Measures

New York has already put forth legislation to curb price increases in the food industry.  Following Wendy's announcement that it will use "dynamic pricing" on its menu items to change their costs depending on the time of day, Assembly Member Angelo Santabarbara introduced a bill that would ban surge pricing on food items.

Read More: New Yorkers Furious "Surge Pricing" Coming to Wendy's

Wendy's quickly backtracked its plans, but the idea has sparked concerns that grocery stores and restaurants could inevitably adopt the practice.

According to a report from The New York Times, consumers are frustrated that prices have not come down despite cooling inflation. The outlet found that grocery chains are still raising prices, just not as quickly as before, and shoppers are taking notice.

Not only that, shoppers are changing their spending habits and that has snack companies like PepsiCo spiraling because they're seeing a stark drop in sales.

When consumers suspect that a company is taking advantage of inflation and other disasters to pad their profits, they are less forgiving than before and are now more likely to take their business elsewhere.

That is why more people are doing their grocery shopping at Walmart, Target, and Aldi; because their prices are seen as more affordable than major grocery chains.

New York's Stance on Price Gouging

WIBX spoke with First Deputy Press Secretary Halimah Elmariah, who explained that all states follow their own set of rules to open a  price gouging investigation, which means New York has a different set of guidelines than Connecticut's.

CT was able to satisfy its requirements to look into price gouging at supermarkets. The same might not be said for New York.

Elmariah explained that the state expanded its price gouging rules in March 2023 to include "taking unfair advantage of the public during abnormal disruptions of the market."

"Abnormal disruptions" include power failures, extreme supply shortages, strikes, extreme weather events, and other instances deemed out-of-the-ordinary. The state has successfully investigated and sued several companies that violated these guidelines.

An example of the state enforcing its anti-price gouging rules is when Walgreens illegally raised the price of baby formula during the 2022 shortage.

The state also sued Hillandale Farms Corporation in 2020 and proved it illegally raised the price of its eggs when the nation was in lockdown. The state also won its price gouging suit against Quality King, a wholesale grocery and drug distributor, for selling Lysol products at inflated prices at the start of the pandemic.

At this time, the state has not opened a similar investigation to that of Connecticut's. Elmariah could not confirm nor deny New York is looking at its options at this time - but it is likely the state, as well as many others, are interested in what happens next.

The nation still struggling with lingering issues from the pandemic such as supply chain issues and staffing shortages, as well as the wars in Ukraine and Israel. This probably satisfies the state's definition of "abnormal disruptions" to the market.

If you feel you are being charged unfairly for essential goods and services, fill out the AG's Price Gouging Complaint Form. It should be noted the office is dealing with a "volume of complaints," so it's heavily advised to provide proof of all wrongdoing to help your case - and theirs.

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