REPORT: Big food price-gouging outpaces inflation to enrich shareholders

New research from watchdog group Accountable.us revealed recently that several Big Food mega-corporations have fueled increased profits, shareholder dividends, and stock buybacks with aggressive price increases that outpace the national rate of inflation.

The Accountable.us analysis showed that staple food companies Mcdonald’s, Domino’s Pizza, Yum! Brands, and Coca-cola have increased their prices at greater rates than baseline food inflation, allowing them to spend hundreds of millions rewarding their wealthy shareholders.

“The latest super-sized earnings reports show Big Food CEOS did not need to raise prices so high, yet the industry keeps pushing the envelope to pad profits and enrich a small group of wealthy investors,” said Accountable.us’ Liz Zelnick. “The industry will keep announcing unpalatable price hikes despite boasting of increased profits and enough disposable money for shareholder giveaways -- not because they should, but because they can.”

This Week In Big Food Profiteering: Accountable.us’ review of the latest quarterly financial statements found price increases are fueling shareholder dividends and stock buybacks at four major food brands:

•Mcdonald’s spent $2.1 billion on a combination of cash dividends and stock buybacks in Q1 2024 alone. Meanwhile, since 2014, the company has increased prices at more than triple the rate of inflation, even admitting to investors that its price increases have begun to drive low-income customers away.

•Domino’s Pizza saw its net income increase more than 20% year over year in Q1 2024, and celebrated by spending $368 million on dividends and buybacks. Though Domino’s increased its spending on dividends by $254 million from Q1 2023, CFO Sandeep Reddy attempted to shift the blame by attributing the company’s “high-single digits” price hikes to a minimum wage increase in California.

•Yum! Brands, which operates fast food chains KFC, Pizza Hut, and Taco Bell, spent $189 million on shareholder dividends in Q1 2024. This came after Taco Bell, one of its most successful franchises, increased its prices by 81% over the last decade, while national inflation pushed prices up by only 31% over the same period.

•Coca-cola spent more than $800 million on dividends and buybacks in Q1 2024, while its prices increased by 13% since Q1 2023.