Subcommittee Analysis Reveals Excessive Corporate Price Hikes Have Hurt Consumers and Fueled Inflation, While Enriching Certain Companies

Nov 4, 2022
Press Release
Analysis Shows that Shipping, Rental Cars, Meat Processing, and Oil and Gas Industries Have Raked in Record-Breaking Profits

Washington, D.C. (Nov. 4, 2022)—Today, Rep. Raja Krishnamoorthi, Chairman of the Subcommittee on Economic and Consumer Policy, released a staff analysis entitled “Power and Profiteering:  How Certain Industries Hiked Prices and Drove Inflation,” which details how certain corporations have engaged in excessive price hikes, raking in record profits while U.S. consumers have faced high inflation. 


“Today’s analysis reaffirms what an overwhelming 80% majority of Americans already recognize according to a recent poll:  under the guise of inflation, certain corporations excessively hiked prices far beyond what their costs necessitated, further driving inflation.  As American corporations report their highest profit margins the United States has seen in over seventy years, executives of leading companies are admitting on earnings calls that they’re taking advantage of inflation.  One executive argued that ‘a little bit of inflation is always good in our business’ while another admitted that his company’s prices wouldn’t fall with decreasing costs, stating ‘we don’t reduce prices on the back end of these increases.’  It is unacceptable that certain companies and industries are engaged in extreme price hikes under the cover of inflation.  Americans understand this is happening, and they want it to stop.  We have an obligation in Congress to shine light on this practice, which is exactly what today’s analysis does,”  said Chairman Krishnamoorthi.


On September 22, 2022, the Subcommittee held a hearing that examined evidence of the inflationary effects of corporate pricing decisions.  Recent economic studies and the Subcommittee’s analysis of corporate financial information demonstrate that certain corporate pricing decisions have played a key role in expanding corporate profit margins and driving inflation, which was already elevated due to supply chain disruptions caused by the pandemic, Russia’s unjustified and illegal war in Ukraine, and other factors.


Below are key findings from the staff analysis:


  • Consumer prices began to rise in early 2021 due in part to a strong pandemic recovery and supply chain disruptions.  Prices began to rise in the United States in early 2021 as the economy started to fully reopen due to the widespread availability of coronavirus vaccines and the lifting of pandemic restrictions.  Supply chain disruptions—especially following Vladimir Putin’s illegal invasion of Ukraine—account for further inflation, but these factors do not account for all recent price increases.
  • Certain corporations are using the cover of inflation to raise prices excessively, resulting in record profits and profit margins.  Beginning in 2021, certain corporations began enjoying record profits and profit margins—and continue to do so today.  The Subcommittee’s analysis of financial information from a sampling of the largest corporations in several industries shows massive increases in profits between 2019 and 2021:


    • Three of the five largest companies in the shipping industry saw profits rise by 29,965%;


    • The two largest public companies in the rental car industry enjoyed a profit increase of 597%;
    • Four of the largest public companies in the meat processing industry saw profits go up by 134%; and
    • Four of the ten largest public companies by market cap in the oil and gas industry had profits rise by 62%.


Over the same period, profit margins increased by 201% among the companies analyzed in the shipping industry, by 262% among the companies analyzed in the rental car industry, and by 53% among the companies analyzed in the meat processing industry.


  • Corporate statements confirm that certain corporations are seeking record profits.  Statements from corporate executives in certain industries show they are exploiting news about inflation to raise prices even more than necessary to cover costs.  For example:


    • “[A] little bit of inflation is always good in our business.”  (Kroger, June 18, 2021)
    • “[W]e’re actually pricing to recover all of those inflationary impacts, just as we’ve done in the past.  So you’ve seen us move retail prices up.  As inflation has moved up mid-single digits, our pricing has moved. . . . And as I’ve said before, inflation has been a little bit of our friend in terms of what we see in terms of retail pricing.  [F]ollowing periods of higher inflation, our industry has historically not reduced pricing to reflect lower ultimate cost.”  (Autozone, May 25, 2022)
    • “[O]ur total pricing actions are forecasted to more than offset raw material and delivery cost increases.  We are closely monitoring supply costs and other inflation, and we’re prepared to implement further increases as necessary. . . . [W]e don’t reduce prices on the back end of these increases [in underlying costs].”  (HB Fuller, June 23, 2022)


  • Recent economic studies make clear that record corporate markups, profits, and profit margins contributed to—and continue to contribute to—ongoing inflation.  Studies by the Economic Policy Institute and Roosevelt Institute demonstrate that profits contributed more to price growth in the United States from mid-2020 through the end of 2021 than at any other point from 1979 to the present—and continue to contribute markedly today.  This is especially true in highly concentrated industries.


  • The American people—echoing the economic data and statements from corporate leaders—recognize that corporate pricing decisions are contributing to inflation.  A recent poll found that 80% of registered voters view corporations “raising prices to make record profits” as a cause of inflation.


Click here to read the staff analysis.


117th Congress