Inflation and food prices are a topic of utmost importance

Expensive Big Mac meals and fears of sudden price increases at supermarkets have put food chains and consumer goods companies in the crosshairs of politicians.

WalmartMcDonald's and Kroger These are just some of the companies that have been caught up in the debate over high inflation in the 2024 elections.

On Monday, Sens. Elizabeth Warren, D-Mass., and Bob Casey, D-Pa., sent a letter to Kroger CEO Rodney McMullen questioning the grocery chain’s rollout of electronic shelf labels, arguing that the technology could make it easier to mark up prices on high-demand items. The letter also noted that the grocery chain could grow, depending on whether it closes its pending $24.6 billion acquisition of rival Albertsons.

Democrats, particularly those like Casey who are trying to win elections in key states, are seeking to capitalize on anti-corporate frustration over inflation. The moves come after years of Republican attempts to blame price hikes on President Joe Biden, who has also criticized corporations for what he has called greedy tactics.

For example, In late May, an X-bill run by House Republican leaders criticized Biden’s economic policies by listing some of the popular fast-food menu items that customers now pay extra for at McDonald’s, Chick-fil-A and Taco Bell. (The source of the data is unclear, and McDonald’s has denied that its average prices have risen that much.)

In the midst of presidential campaigns, both Democratic Vice President Kamala Harris and former Republican President Donald Trump have pledged to fight persistent inflation, although they attribute different causes.

Harris has said at her rallies that she will fight corporate “price gouging.” At his own rallies, Trump has criticized the Biden administration’s policies and said he will end the “nightmare of inflation.”

The fact that both parties have made fighting inflation a key part of their campaigns shows how much the cost of food, gasoline and housing is on the minds of consumers across income levels, regions and political parties. The criticism could also increase the pressure on companies to show they can cut prices or offer value.

Inflation has cooled from its highest levels in decades, with food prices rising about 1.1% year-over-year through June, according to data from the U.S. Bureau of Labor Statistics. But eating at home is up 26.2% since June 2019 and eating out, which primarily includes restaurant meals, is up 27.2% over the same period.

Americans ranked inflation and prices as their most important issue in the latest Economist/YouGov poll, which included a representative sample of about 1,600 adult US citizens. That outpaced other issues that came up during the election campaign, such as immigration, climate change and health care.

Promising to tackle higher everyday costs is a surefire campaign theme in contentious times. said Cait Lamberton, a marketing professor at the Wharton School of the University of Pennsylvania.

“There's not much we can agree on, is there? But we can agree on that,” he said.

It is often difficult to justify how a policy will affect voters' lives. The same is not true for the cost of basic goods.

“There's a very nice and easy causal connection between voting for a person and believing that my grocery bill might go down,” she said.

Kroger was just the latest high-profile company named in the political rhetoric surrounding inflation.

In late May, McDonald's found itself in a tough spot. Several viral social media posts criticized the affordability of the burger giant's products, from an $18 Big Mac meal at a Connecticut location to charts claiming the chain's prices had more than doubled in the past five years.

Republicans seized on the controversy and jumped on McDonald's menu prices are in line with Biden's economic policy in an attempt to win over voters fed up with inflation. The X-publisher did not criticize McDonald's for the increases.

In response to the scandal, McDonald's U.S. president Joe Erlinger wrote an open letter and published fact sheets about the chain's pricing. It was a big step for the company, which typically handles rumors or negative press with a succinct statement, not a 13-paragraph letter from a top executive.

McDonald's said The actual average prices for a Big Mac or 10-piece McNugget have risen 21% and 28%, respectively, over the past five years — significant increases, but much smaller than those described on social media.

“I expect prices at your local McDonald's to be a topic of conversation and attention in the coming months,” Erlinger wrote, indirectly referring to the election cycle.

Several senators have also criticized Walmart, the nation's largest grocer by annual revenue, and Kroger, the nation's largest supermarket operator, for adopting technology that could make food even more expensive.

In their letter sent Monday, Warren and Casey said Kroger already has high profits and questioned why it needs electronic shelf labels, which allow for “dynamic pricing,” a practice associated with airlines and Uber’s surge pricing based on high demand.

“It is outrageous that while families continue to struggle to afford the food they need, food giants like Kroger continue to engage in price gouging and other corporate profit schemes,” the senators wrote.

Sen. Sherrod Brown, a Democrat from Ohio who is running for reelection in an increasingly Republican state, sent a similar letter to Walmart in May expressing concerns about its own adoption of shelf labels that could facilitate the use of dynamic pricing.

Casey, Brown and other senators in competitive races have also criticized snack makers for “shrinkflation” — shrinking the size of items but charging the same price.

A Walmart spokesperson said the retailer won't change its “everyday low prices” approach and highlighted some of its back-to-school deals, including a food basket that provides two weeks of kids' lunches for about $2 a day.

Kroger did not say how it will use electronic shelf labels, but the grocer said in a statement that keeping prices low “is the foundation of our strategy.”

“Lower prices attract more loyal customers who help us grow our business,” the company said.

Wharton's Lamberton said that to fend off criticism, companies need to do a better job of explaining why they raised costs or renegotiated with suppliers. They also need to tell their story better in their ads, she said.

For example, as families prepare for the first day of school, Amazon and Walmart have advertised school supplies starting at 25 cents. Amazon has launched TV ads with bold messages encouraging parents to spend less on their children.

Over the next two weeks, many of the country’s top retailers, including Walmart, Home Depot and Target, will report their earnings. They may also defend their prices and highlight ways they are creating value, following in the footsteps of some restaurants.

For example in ChipotleOn the chain's earnings call in late July, Chief Executive Brian Niccol denied that the chain had told workers to scoop less into burrito bowls, but said the company would reemphasize generosity. Like McDonald's, Chipotle was the target of social media furor — but for portion sizes, not prices.

McDonald's, meanwhile, is expanding its $5 menu in most U.S. markets. The promotion debuted in June, shortly after facing criticism on social media that highlighted consumer perceptions that its prices were too high.

Other fast-food chains, such as Wendy's and Taco Bell, have also introduced or revived their own $5 meals. While the primary goal of the deals is to boost sales, they have the added benefit of keeping their brands off the hook in case politicians pursue another “greedflation” target.

These deals have been driven, in part, by business realities: Consumers have generally cut back on restaurant spending in recent months.