The best Reddit client app is in danger due to price demands - AppleInsider

Apollo for Reddit

Early in 2023, Reddit announced that it would begin charging for access to its API, and that price may kill off Apollo, the best client app out there.

Christian Selig, a former Apple employee, built Apollo years ago and it has become one of the most popular third-party Reddit apps on the market. Reddit's pricing for access to its APIs may box the developer out entirely, which may mean the end of the popular client.

According to Christian, he spoke with Reddit several different times regarding the price, and ultimately determined that Apollo would have to pay Reddit $20 million per year to keep functioning as it is today. He breaks things down further, saying Apollo made 7 billion requests during the course of April, and that would break down to around $1.7 million per month.

Christian notes when Reddit announced the pricing for API access, it said the price would be "reasonable and based in reality," and that Reddit would "not operate like Twitter." The developer pointed out that another site, Imgur, costs just $166 for the same 50 million API calls.

He goes even further, saying:

"As for the pricing, despite claims that it would be based in reality, it seems anything but. Less than 2 years ago they said they crossed $100M in quarterly revenue for the first time ever, if we assume despite the economic downturn that they've managed to do that every single quarter now, and for your best quarter, you've doubled it to $200M.

Let's also be generous and go far, far above industry estimates and say you made another $50M in Reddit Premium subscriptions. That's $550M in revenue per year, let's say an even $600M. In 2019, they said they hit 430 million monthly active users, and to also be generous, let's say they haven't added a single active user since then (if we do revenue-per-user calculations, the more users, the less revenue each user would contribute).

So at generous estimates of $600M and 430M monthly active users, that's $1.40 per user per year, or $0.12 monthly."

Unfortunately, Christian says that while Reddit has been "civil" during their discussions, there does not appear to be any flexibility in the pricing. Which means price demands may cause Apollo to shut down completely.

As it stands right now, Christian says the situation "requires some thinking," and says he doesn't see how this pricing scheme is based anywhere in reality or "remotely reasonable."

Twitter has followed a similar route in 2023. In January the social network cut off all access to its APIs from third-party apps, effectively killing them off. And following several delays, Twitter has its own ridiculously high paid access to APIs, which is set at $42,000 per month.

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C3.ai Stock (NYSE:AI): Beware of Vertical Price Moves - TipRanks

Parabolic price moves are awe-inspiring, and it’s tempting to jump on the bandwagon, but beware, as C3.ai (NYSE:AI) stock may have gotten ahead of itself. C3.ai is a promising business in the artificial intelligence (AI) space, but I am neutral on AI stock because its steep trajectory seems to indicate sky-high market expectations, which no company should ever have to fulfill.

C3.ai is, as the company’s name suggests, a provider of AI-empowered software products. Now, I’m certainly not denying that machine learning will be relevant throughout the 2020s. Economists with Goldman Sachs (NYSE:GS) estimate that, over the next decade, AI will increase productivity in the U.S. by around 1.5% per year. Besides, the popularity of OpenAI’s ChatGPT chatbot shows how pervasive generative AI has become.

Just remember, though, that the financial markets are highly efficient, especially since everyone has immediate access to the relevant data nowadays. Thus, if people already understand the growth runway for machine learning in general — and if they’re prematurely pricing in terrific results for C3.ai in particular — this sounds like a recipe for disappointment ahead.

C3.ai Stock Goes to the Moon, but Not Necessarily Because of C3.ai

First and foremost, please take a look at the price chart of AI stock. It rose 33.42% on Tuesday, May 30, and that’s just one trading session. The company didn’t even release its fourth-quarter Fiscal-Year 2023 earnings results yet; that event is scheduled to take place after the market closes on Wednesday, May 31. So, why on earth would C3.ai stock skyrocket before the company’s earnings release?

Surely, a major factor is what we might call “AI fever.” Practically every mega-cap technology company’s first-quarter 2023 conference call mentioned AI multiple times. Investors have been eager to buy anything and everything with a connection to AI lately, especially if it involves generative AI. It’s starting to remind me of initial coin offerings (ICOs) in 2018 and non-fungible tokens (NFTs) in 2021 (though I’ll admit that AI will likely have more real-world utility and enduring value than most cryptocurrencies and NFTs).

What really pushed C3.ai stock so high, though, is the recent enthusiasm surrounding Nvidia (NASDAQ:NVDA). Since NVDA stock zoomed higher after Nvidia released forecast-beating quarterly earnings results, I suspect that financial traders want to front-run each other and buy AI stock in anticipation of a similar earnings blowout.

C3.ai Already Released Its Quarterly Results (Sort Of)

Speaking of front-running, let’s not ignore the fact that C3.ai already released its preliminary earnings results for Q4 FY2023. Hence, not only did AI stock traders already price in an outstanding set of quarterly results, but C3.ai eliminated much of the earnings-event uncertainty by releasing the company’s estimated ranges for its revenue, income (or lack thereof), and more.

Just to sum it up for your convenience, C3.ai expects to report quarterly revenue of $72.1 million to $72.4 million, a non-GAAP loss from operations totaling $23.7 million to $23.9 million, and free cash flow in the range of $18.0 million to $19.4 million. So, the company admits that it’s unprofitable. I’m not saying C3.ai is a zombie company or anything like that, but only that the general optimism surrounding C3.ai is somewhat overstated.

Furthermore, while C3.ai’s C3 Generative AI product is now widely available, the company still doesn’t have the most popular generative AI product; that title undoubtedly belongs to OpenAI’s ChatGPT. That’s a problem because some stockholders probably think that C3.ai is the leader of the generative AI market simply because “AI” is in the company’s name and stock ticker symbol.

Is AI Stock a Buy, According to Analysts?

Turning to Wall Street, AI stock comes in as a Hold based on three Buys, three Holds, and four Sell ratings. The average C3.ai stock price target is $20.50, implying over 53% downside potential.

If you’re wondering which analyst you should follow if you want to buy and sell AI stock, the most accurate analyst covering the stock (on a one-year timeframe) is Patrick Walravens of JMP Securities, with an average return of 17.32% per rating and a 60% success rate. Click on the image below to learn more.

Conclusion: Should You Consider C3.ai Stock?

As long as machine learning is top-of-mind on Wall Street, C3.ai will remain the focus of attention among short-term stock traders. Don’t expect this phase of the hype cycle to last forever, though.

I like C3.ai as a company, but not as much as AI’s stock chart would suggest. The best strategy, in my opinion, would likely be to wait for a pullback in the C3.ai share price before considering buying. If the upcoming quarterly earnings event makes me look foolish, and C3.ai stock keeps on rocketing higher, I don’t mind at all. That’s because sometimes, vertical price moves can persist for a surprisingly long time before gravity finally sets in.

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3-year-old on scooter hit by car, killed in West Price Hill - FOX19

CINCINNATI (WXIX) - Two children riding an electric scooter were hit by a car in West Price Hill Tuesday night, according to Cincinnati police.

It happened around 9 p.m. at the intersection of Heyward Street and 1st Avenue.

The children are 3 and 9 years old.

The parents took the children to the hospital, and the 3-year-old has since died, according to CPD Capt. Joe Robinson.

The 9-year-old is at Cincinnati Children’s Hospital Medical Center for treatment.

The driver is cooperating with police. No word on what led to the crash.

Police are investigating.

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Copyright 2023 WXIX. All rights reserved.

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Diablo 4 Players Are Already Unhappy With Microtransaction Prices - GameRant

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Diablo 4 Players Are Already Unhappy With Microtransaction Prices  GameRant

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'A definitive recovery?' Home prices increase for the second month in a row - Yahoo Finance

US home prices again increased month over month in March, according to two separate indexes, reflecting the continued inventory shortages stymieing homebuyers.

The S&P CoreLogic Case-Shiller US National Home Price index rose 0.4% in March compared with the previous month, according to data released on Tuesday. That was the second straight month of gains after seven consecutive months of price declines. The index uses the repeat sales method to measure home price growth. This method uses data on properties that have sold at least twice to more accurately calculate the change in each home's value.

On a year-over-year basis, home price growth decelerated again. Housing values edged just 0.7% higher in March — lower than the 2.1% annual gain recorded in February. The index is 3.6% below its June 2022 peak.

The index that tracks housing values in the 20 largest metros showed prices in March rose 0.5% on a seasonally adjusted basis over the prior month and fell 1.10% over the same period a year ago. Economists surveyed by Bloomberg expected no change for the month and a 1.60% decrease versus last year.

"Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end," Craig Lazzara, managing director at S&P DJI, said in a statement. "That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months."

Similarly, the Federal Housing Finance Agency reported Tuesday that home prices increased 0.6% in March from the previous month on a seasonally adjusted basis. On a quarterly basis, US house prices in the first quarter rose 4.3% from the same period last year and were up 0.5% versus the fourth quarter of 2022.

Regionally, the cities that registered the biggest price increases versus last year were Miami, Tampa, and Charlotte, with annual gains of 7.7%, 4.8%, and 4.7%, respectively.

The Southeast remains the nation's most robust housing region, with prices there up 5.4% in March, according to the S&P CoreLogic Case-Shiller index. The FHFA index found that prices in the South Atlantic jumped 7.2% year over year in the first quarter — the strongest showing of the seven census divisions it tracks.

That's a departure from such Western markets as Seattle and San Francisco, which experienced home price declines of 12.4% and 11.2%, respectively. Prices in the West region overall fell 6.2%, the weakest of all regions, according to the S&P CoreLogic Case-Shiller index.

The FHFA reported that the Pacific and Mountain divisions were the only seven census areas that recorded year-over-year home price declines in the first quarter.

"Though the national housing market is far from balanced, many local markets have seen softened prices and climbing inventory, a sign that balance is on the way locally," Hannah Jones, Realtor.com's economic data analyst, said in an emailed statement before both indexes were released. "On the other hand, many low-priced markets continue to see relatively high demand and price growth as buyers flock to areas that are still in the realm of possibility for homeownership."

Same old song and dance? House for sale in Washington, D.C. (Photo by Ting Shen/Xinhua via Getty Images)

A dearth of homes for sale remains one of the big drivers of today's housing market, propping up prices.

Elevated mortgage rates also continue to squeeze affordability for buyers, while also discouraging homeowners from listing their properties. The average rate on the average 30-year fixed mortgage increased again last week, according to Freddie Mac, jumping to 6.57% from 6.39% the previous week.

Recent housing data further underscores this inventory imbalance dynamic.

There was no seasonal bump in home sales under contract, with pending sales recording no change from March to April. National Association of Realtors Chief Economist Lawrence Yun largely blamed limited inventory, noting an increase in homes for sale is "critical to get more Americans moving.”

Homebuilders, though, are capitalizing on the shortage of resale homes. Frustrated by the lack of choices, more buyers are choosing new home construction, driving up those sales.

“This phenomenon has become a boon for homebuilders and especially the larger, well-capitalized public builders," Toll Brothers (TOL) CEO Douglas Yearley said on the builder's earnings call last week.

Janna is the personal finance editor for Yahoo Finance. Follow her on Twitter @JannaHerron.

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Joan Didion’s NYC apartment gets a big $1M price cut - New York Post

After listing in late January for $7.5 million, Joan Didion’s former Upper East Side address still hasn’t found a buyer — and has taken a seven-digit knockdown as a result. 

The East 71st Street 4.5-bathroom is now asking for $6.5 million.

The beloved and enormously influential “Goodbye to All That” writer died inside the four-bedroom co-op in December of 2021 following complications from Parkinson’s disease. 

She was 87 and predeceased by her daughter, Quintana Roo Dunne, who passed in 2005 at age 39, as well as her husband, John Gregory Dunne, who died of a heart attack in December 2003, at 71.

Dunne, a writer, also passed away in the unit — an account of which opens Didion’s 2004 memoir on grief, “The Year of Magical Thinking.”

Didion and Dunne purchased the 11-room abode together in 1988, and it became their primary residence.

During her lifetime, Didion was active on the building’s co-op board. 

Just over a block from Central Park, the spacious pre-war domicile boasts a large, split-level living room and library with a wood-burning fireplace, herringbone floors, pale blue bookshelves and matching moldings.

The split-level living room and library.

Real Estate Production Network for Sothebyâs International Realty

The kitchen features premium appliances.

Real Estate Production Network for Sothebyâs International Realty

The co-op has four bedrooms.

Real Estate Production Network for Sothebyâs International Realty

The facade of the building.

Stefano Giovannini for NY Post

A portrait of Didion in the apartment.

Corbis via Getty Images

There’s an eat-in kitchen with chef’s grade appliances — Didion was a frequent cook — plus a wet bar, beamed ceilings, oversize windows and wide hallways throughout. 

It is accessed via a “semi-private elevator landing” and also features a staff room with an ensuite bath, laundry room and pantry.

Amenities at the prestigious limestone building, constructed in 1928, include a 24-hour doorman, hall attendants, a resident manager, fitness center and bike storage.

The listing is held by Serena Boardman of Sotheby’s International Realty. 

When the unit first hit the market this past winter, it was on the heels of an estate auction of Didion’s old belongings, which saw a dictionary sell for $11,000 and a pair of the novelist’s Céline sunglasses command $27,000, The Post previously reported. 

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Companies Push Prices Higher, Protecting Profits but Adding to Inflation - The New York Times

Corporate profits have been bolstered by higher prices even as some of the costs of doing business have fallen in recent months.

The prices of oil, transportation, food ingredients and other raw materials have fallen in recent months as the shocks stemming from the pandemic and the war in Ukraine have faded. Yet many big businesses have continued raising prices at a rapid clip.

Some of the world’s biggest companies have said they do not plan to change course and will continue increasing prices or keep them at elevated levels for the foreseeable future.

That strategy has cushioned corporate profits. And it could keep inflation robust, contributing to the very pressures used to justify surging prices.

As a result, some economists warn, policymakers at the Federal Reserve may feel compelled to keep raising interest rates, or at least not lower them, increasing the likelihood and severity of an economic downturn.

“Companies are not just maintaining margins, not just passing on cost increases, they have used it as a cover to expand margins,” Albert Edwards, a global strategist at Société Générale, said, referring to profit margins, a measure of how much businesses earn from every dollar of sales.

PepsiCo, the snacks and beverage maker, has become a prime example of how large corporations have countered increased costs, and then some.

Hugh Johnston, the company’s chief financial officer, said in February that PepsiCo had raised its prices by enough to buffer further cost pressures in 2023. At the end of April, the company reported that it had raised the average price across its products by 16 percent in the first three months of the year. That added to a similar size price increase in the fourth quarter of 2022 and increased its profit margin.

“I don’t think our margins are going to deteriorate at all,” Mr. Johnston said in a recent interview with Bloomberg TV. “In fact, what we’ve said for the year is we’ll be at least even with 2022, and may in fact increase margins during the course of the year.”

The bags of Doritos, cartons of Tropicana orange juice and bottles of Gatorade drinks sold by PepsiCo are now substantially pricier. Customers have grumbled, but they have largely kept buying. Shareholders have cheered. PepsiCo declined to comment.

PepsiCo is not alone in continuing to raise prices. Other companies that sell consumer goods have also done well.

The average company in the S&P 500 stock index increased its net profit margin from the end of last year, according to FactSet, a data and research firm, countering the expectations of Wall Street analysts that profit margins would decline slightly. And while margins are below their peak in 2021, analysts are forecasting that they will keep expanding in the second half of the year.

For much of the past two years, most companies “had a perfectly good excuse to go ahead and raise prices,” said Samuel Rines, an economist and the managing director of Corbu, a research firm that serves hedge funds and other investors. “Everybody knew that the war in Ukraine was inflationary, that grain prices were going up, blah, blah, blah. And they just took advantage of that.”

But those go-to rationales for elevating prices, he added, are now receding.

The Producer Price Index, which measures the prices businesses pay for goods and services before they are sold to consumers, reached a high of 11.7 percent last spring. That rate has plunged to 2.3 percent for the 12 months through April.

The Consumer Price Index, which tracks the prices of household expenditures on everything from eggs to rent, has also been falling, but at a much slower rate. In April, it dropped to 4.93 percent, from a high of 9.06 percent in June 2022. The price of carbonated drinks rose nearly 12 percent in April, over the previous 12 months.

“Inflation is going to stay much higher than it needs to be, because companies are being greedy,” Mr. Edwards of Société Générale said.

But analysts who distrust that explanation said there were other reasons consumer prices remained high. Since inflation spiked in the spring of 2021, some economists have made the case that as households emerged from the pandemic, demand for goods and services — whether garage doors or cruise trips — was left unsated because of lockdowns and constrained supply chains, driving prices higher.

David Beckworth, a senior research fellow at the right-leaning Mercatus Center at George Mason University and a former economist for the Treasury Department, said he was skeptical that the rapid pace of price increases was “profit-led.”

Corporations had some degree of cover for raising prices as consumers were peppered with news about imbalances in the economy. Yet Mr. Beckworth and others contend that those higher prices wouldn’t have been possible if people weren’t willing or able to spend more. In this analysis, stimulus payments from the government, investment gains, pay raises and the refinancing of mortgages at very low interest rates play a larger role in higher prices than corporate profit seeking.

“It seems to me that many telling the profit story forget that households have to actually spend money for the story to hold,” Mr. Beckworth said. “And once you look at the huge surge in spending, it becomes inescapable to me where the causality lies.”

Mr. Edwards acknowledged that government stimulus measures during the pandemic had an effect. In his eyes, this aid meant that average consumers weren’t “beaten up enough” financially to resist higher prices that might otherwise make them flinch. And, he added, this dynamic has also put the weight of inflation on poorer households “while richer ones won’t feel it as much.”

The top 20 percent of households by income typically account for about 40 percent of total consumer spending. Overall spending on recreational experiences and luxuries appears to have peaked, according to credit card data from large banks, but remains robust enough for firms to keep charging more. Major cruise lines, including Royal Caribbean, have continued lifting prices as demand for cruises has increased going into the summer.

Many people who are not at the top of the income bracket have had to trade down to cheaper products. As a result, several companies that cater to a broad customer base have fared better than expected, as well.

McDonald’s reported that its sales increased by an average of 12.6 percent per store for the three months through March, compared with the same period last year. About 4.2 percent of that growth has come from increased traffic and 8.4 percent from higher menu prices.

The company attributed the recent menu price increases to higher expenses for labor, transportation and meat. Several consumer groups have responded by pointing out that recent upticks in the cost of transportation and labor have eased.

A representative for the company said in an email that the company’s strong results were not just a result of price increases but also “strong consumer demand for McDonald’s around the world.”

Other corporations have found that fewer sales at higher prices have still helped them earn bigger profits: a dynamic that Mr. Rines of Corbu has coined “price over volume.”

Colgate-Palmolive, which in addition to commanding a roughly 40 percent share of the global toothpaste market, also sells kitchen soap and other goods, had a standout first quarter. Its operating profit for the year through March rose 6 percent from the same period a year earlier — the result of a 12 percent increase in prices even as volume declined by 2 percent.

The recent bonanza for corporate profits, however, may soon start to fizzle.

Research from Glenmede Investment Management indicates there are signs that more consumers are cutting back on pricier purchases. The financial services firm estimates that households in the bottom fourth by income will exhaust whatever is collectively left of their pandemic-era savings sometime this summer.

Some companies are beginning to find resistance from more price-sensitive customers. Dollar Tree reported rising sales but falling margins, as lower-income customers who tend to shop there searched for deals. Shares in the company plunged on Thursday as it cut back its profit expectations for the rest of the year. Even PepsiCo and McDonald’s have recently taken hits to their share prices as traders fear that they may not be able to keep increasing their profits.

For now, though, investors appear to be relieved that corporations did as well as they did in the first quarter, which has helped keep stock prices from falling broadly.

Before large companies began reporting how they did in the first three months of the year, the consensus among analysts was that earnings at companies in the S&P 500 would fall roughly 7 percent compared with the same period in 2022. Instead, according to data from FactSet, earnings are expected to have fallen around 2 percent once all the results are in.

Savita Subramanian, the head of U.S. equity and quantitative strategy at Bank of America, wrote in a note that the latest quarterly reports “once again showed corporate America’s ability to preserve margins.” Her team raised overall earnings growth expectations for the rest of the year, and 2024.

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Memorial Day 2023: Food prices for weekend barbecues up over last year - Axios

Data: BLS; Chart: Axios Visuals

With inflation still sizzling, most of the fixings for your Memorial Day weekend barbecue will cost more.

The big picture: While the latest Consumer Price Index found food prices were up 7.7% in the 12 months through April, prices for classic barbecue staples like ketchup and mustard have had much larger increases, research firm Datasembly told Axios.

• A Memorial Day basket of seven barbecue essentials cost $27.32 in 2023 compared to $25.07 the same time last year, a nearly 9% increase, per Datasembly’s analysis.
• More than 75% of consumers said they expect rising prices to impact their holiday spending, according to a survey by Numerator.

By the numbers: A 32-ounce bottle of ketchup had the biggest increase at 27.9%, followed by a 20-ounce bottle of mustard that went up 13% and relish up 12.3%, Datasembly found.

• The only item with a slight decline was a pack of 80/20 fresh ground beef burgers that went down in price by 3 cents.
• Hot dogs cost almost 3% more, Datasembly found, similar to what the April CPI showed.
• Hamburger and hot dog buns were each up about 7.4%, per Datasembly, which is in line with rising flour and bakery product costs.

Ribeye steaks had the largest increase of beef products compared to a year ago, according to data provided to Axios from Circana OmniMarket Integrated Fresh, a Chicago-based market research firm.

• The average price for a pound of ribeye steaks was $12.57 in the four weeks through May 14, which is up 11.6% compared to a year ago, per Circana, which tracked retail sales at U.S. supermarkets, big-box retailers, convenience stores and other locations.

Meanwhile, the U.S. average price for a pound of 100% ground beef is $4.79 as of April, according to federal data, which was down from a record high of $4.937 in August 2022.

• Prices of ground beef vary by region with the West having the highest average price in April of $5.48 per pound and the Midwest having the lowest at $4.652 a pound, fed data showed.

Yes, but: Inflation has slowed and isn’t impacting many food prices the same way it did last summer.

• In May 2022, hot dog prices were up 16.3% compared to the year before, CPI data showed.

More from Axios:

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UK government says it is meeting with food bosses over high prices — but denies it will impose caps - CNBC

Shoppers visit a supermarket in Manchester, Britain, March 22, 2023. The government is reportedly in discussions with supermarkets over voluntary price caps on some items.

Xinhua News Agency | Xinhua News Agency | Getty Images

LONDON — The U.K. government said it is engaging with the food sector amid attempts to reduce the inflation-driven strain on British households — but dismissed the possibility of mandating price caps on supermarket goods.

"The government is not considering imposing price caps. Any scheme to help bring down food prices for consumers would be voluntary," a government spokesperson told CNBC by email.

"We know the pressure households are under with rising costs and while inflation is coming down, food prices remain stubbornly high. That's why the prime minister and the chancellor have been meeting with the food sector to see what more can be done."

Citing sources, the Sunday Telegraph had on Saturday said that aides in Prime Minister Rishi Sunak's office have begun work on a scheme that would see supermarkets voluntarily charge the lowest possible amount for certain items.

Asked in an interview with the BBC on the possibility of a supermarket price cap on basic foods, British Health Secretary Steve Barclay said that the government wanted "constructive discussions with supermarkets about how we work together, not about any element of compulsion."

Such a proposal would mirror efforts already undertaken in France. A group of major French supermarkets in March agreed to cut prices on a range of basic items and to target a 10% ceiling on average price increases due to input costs. Retailers can choose on which items they cut prices.

French Finance Minister Bruno Le Maire later said he would use "all the powers at my disposal to ensure that the big industrial companies pass on the decrease [in wholesale prices]," Reuters reported.

Food prices have stayed stalwartly strong in Britain. Headline consumer price inflation in the U.K. eased to 8.7% in April from the 10.1% of March, largely due to declines in energy prices. But the inflation rate for food and non-alcoholic beverages proved more resilient, coming in at 19.1% in April, nearly flat on the 19.2% of March. The Office for National Statistics said that was the highest rate for more than 45 years.

The U.K. economic outlook has brightened somewhat, with the Bank of England and International Monetary Fund saying they no longer forecast a recession this year.

However, Britons are also grappling with the impact of firm interest rates, with pressure remaining high on the central bank to continue hiking. Many analysts and economists last week upped their expectations for the BoE's peak rate to 5.25% or even 5.5%, from the current rate of 4.5%.

BoE Governor Andrew Bailey earlier this month said that the U.K. was struggling with "second-round" inflation — whereby initial price shocks cause businesses to raise prices and workers achieve wage rises, potentially creating a spiral that can make inflation sticky.

Corporate profits have come under scrutiny, as people struggle with the cost of living. Supermarket profits slipped in the first quarter, with several big firms saying they have offset the majority of input cost increases.

In January, the chairman of Tesco, one of Britain's largest supermarket chains, said it was "entirely possible" that some food firms were profiteering from inflation in order to protect their own margins, and that the business had "fallen out" with some of its suppliers over the issue.

Andrew Opie, director of food and sustainability at industry group the British Retail Consortium, said any supermarket price cap would "not make a jot of difference to prices," which he attributed to "the soaring cost of energy, transport, and labour, as well as higher prices paid to food manufacturers and farmers."

"Rather than recreating 1970s-style price controls, the government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible," Opie said.

CNBC has contacted supermarkets for comment.

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Opinion | Why Inflation Is the Excuse for Higher Grocery Prices - The New York Times

Food Fresh is the only grocery store in a rural stretch of southeastern Georgia. It has many five-star Google reviews touting its freshly butchered meats, tomato bar and friendly service. Yet it faces a threat to its survival that no amount of management skill can overcome. Big retailers like Walmart and Kroger “have a handle on suppliers that I can’t touch,” said Food Fresh’s owner, Michael Gay. The chains wrest deep discounts from suppliers, making it impossible for the store to come close to matching their prices.

To understand why grocery prices are way up, we need to look past the headlines about inflation and reconsider long-held ideas about the benefits of corporate bigness.

Like other independent grocers, Food Fresh buys through large national wholesalers that purchase goods by the truckload, achieving the same volume efficiencies the big chains do. What accounts for the difference in price is not efficiency but raw market power. Major grocery suppliers, including Kraft Heinz, General Mills and Clorox, rely on Walmart for more than 20 percent of their sales. So when Walmart demands special deals, suppliers can’t say no. And as suppliers cut special deals for Walmart and other large chains, they make up for the lost revenue by charging smaller retailers even more, something economists refer to as the water bed effect.

This isn’t competition. It’s big retailers exploiting their financial control over suppliers to hobble smaller competitors. Our failure to put a stop to it has warped our entire food system. It has driven independent grocers out of business and created food deserts. It has spurred consolidation among food processors, which has slashed the share of food dollars going to farmers and created dangerous bottlenecks in the production of meat and other essentials. And in a perverse twist, it has raised food prices for everyone, no matter where you shop.

A level playing field was long a tenet of U.S. antitrust policy. In the 19th century, Congress barred railroads from favoring some shippers over others. It applied this principle to retailing in 1936 with the Robinson-Patman Act, which mandates that suppliers offer the same terms to all retailers. The act allows large retailers to claim discounts based on actual volume efficiencies but blocks them from extracting deals that aren’t also made available to their competitors. For roughly four decades, the Federal Trade Commission vigorously enforced the act. From 1954 to 1965, the agency issued 81 cease-and-desist orders to stop suppliers of milk, tea, oatmeal, candy and other foods from giving preferential prices to the largest grocery chains.

As a result, the grocery retailing sector was enviable by today’s standards. Independent grocery stores flourished, accounting for more than half of food sales in 1958. Supermarket chains like Safeway and Kroger also thrived. This dynamism fed a broad prosperity. Even the smallest towns and poorest neighborhoods could generally count on having a grocery store. And the industry’s diffuse structure ensured that its fruits were widely distributed. Of the nearly nine million people working in retailing overall in the mid-1950s, nearly two million owned or co-owned the store where they worked. There were more Black-owned grocery stores in 1969 than there are today.

Then, amid the economic chaos and inflation of the late 1970s, the law fell into disfavor with regulators, who had come to believe that allowing large retailers to flex more muscle over suppliers would lower consumer prices. For the most part, the law hasn’t been enforced since. As a top Reagan administration official explained in 1981, antitrust was no longer “concerned with fairness to smaller competitors.”

This was a serious miscalculation. Walmart, which seized the opening and soon became notorious for strong-arming suppliers and undercutting local businesses, now captures one in four dollars Americans spend on groceries. Its rise spurred a cascade of supermarket mergers, as other chains sought to match its leverage over suppliers. If the latest of these mergers — Kroger’s bid to buy Albertsons — goes through, just five retailers will control about 55 percent of grocery sales. Food processors in turn sought to counterbalance the retailers by merging. Supermarket aisles may seem to brim with variety, but most of the brands you see are made by just a few conglomerates.

These food giants are now the dominant buyers of crops and livestock. The lack of competition has contributed to the decline in farmers’ share of the consumer grocery dollar, which has fallen by more than half since the 1980s. In the absence of rivals, food conglomerates have over time increasingly been able to raise prices and as a result have reported soaring profits over the past two years. Inflation gives them a cover story, but it’s the lack of competition that allows them to get away with it. Meat prices surged last year among the four companies that control most pork, beef and poultry processing. Companies like PepsiCo and General Mills have also jacked up prices without seeing any loss of sales — a sure sign of uncontested market power.

This has resulted in an ever-worsening cycle: As a system dominated by a few retailers lifts prices across the board — even at Walmart — consumers head to those retailers because of their ability to wrest relatively lower prices or simply because they’re the only options left. Walmart’s share of grocery sales swelled last year as more people flocked to its stores.

Meanwhile, the decline of independent grocers, which disproportionately serve rural small towns and Black and Latino neighborhoods, has left debilitating gaps in our food system. If Food Fresh were to close, residents of Evans County, where the store is, would have to subsist on the limited range of packaged foods sold at a local dollar store or drive about 25 minutes to reach a Walmart. (Nearly a quarter of Evans County residents live in poverty.) Living without a grocery store nearby imposes a daily hardship on people and could lead to an increased risk of diabetes, heart disease and other diet-related illnesses.

Losing small retailers also stifles innovation. New food companies rely on independent retailers to introduce products. But as this diversity of retailers gives way to a monocrop of big chains, start-ups have fewer avenues to success. This results in diminished selection for shoppers, who find store shelves stocked with only what the big food conglomerates choose to produce.

We need to stop big retailers from using their enormous financial leverage over suppliers to tilt the playing field. By resurrecting the Robinson-Patman Act, we could begin to put an end to decades of misguided antitrust policy in which regulators abandoned fair competition in favor of ever-greater corporate scale. There is promising momentum. Last year an unusual coalition of Democratic and Republican lawmakers sent a letter to the F.T.C. urging it to dust off Robinson-Patman. The agency began a broad inquiry in late 2021 into grocery supply issues, which could uncover evidence of price discrimination. This year the agency opened investigations into soft drink and alcohol suppliers for possible violations of the act.

These moves are already drawing fire from an old guard locked in bigger-is-always-better thinking. Jason Furman, a Harvard economist who served as a top adviser to President Barack Obama, tweeted recently that some of the views calling for a reset of our antitrust policies often seem “grounded less in consumer welfare and more in a view that everyone should be shopping at expensive craft boutiques.” But that’s not the story in places like Evans County. In the early days of the pandemic, as Walmart and Amazon compelled manufacturers to steer scarce supplies their way and worsened shortages at local grocers, Mr. Gay worked long days hustling to find alternate sources.

“My meat is fresher,” he said. “My produce is fresher. My customer service is better. Imagine if you made the playing field level. Imagine what I could do.”

Stacy Mitchell is an executive director of the Institute for Local Self-Reliance and the author of “Big-Box Swindle.”

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

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Opinion | Why Inflation Is the Excuse for Higher Grocery Prices - The New York Times

Food Fresh is the only grocery store in a rural stretch of southeastern Georgia. It has many five-star Google reviews touting its freshly butchered meats, tomato bar and friendly service. Yet it faces a threat to its survival that no amount of management skill can overcome. Big retailers like Walmart and Kroger “have a handle on suppliers that I can’t touch,” said Food Fresh’s owner, Michael Gay. The chains wrest deep discounts from suppliers, making it impossible for the store to come close to matching their prices.

To understand why grocery prices are way up, we need to look past the headlines about inflation and reconsider long-held ideas about the benefits of corporate bigness.

Like other independent grocers, Food Fresh buys through large national wholesalers that purchase goods by the truckload, achieving the same volume efficiencies the big chains do. What accounts for the difference in price is not efficiency but raw market power. Major grocery suppliers, including Kraft Heinz, General Mills and Clorox, rely on Walmart for more than 20 percent of their sales. So when Walmart demands special deals, suppliers can’t say no. And as suppliers cut special deals for Walmart and other large chains, they make up for the lost revenue by charging smaller retailers even more, something economists refer to as the water bed effect.

This isn’t competition. It’s big retailers exploiting their financial control over suppliers to hobble smaller competitors. Our failure to put a stop to it has warped our entire food system. It has driven independent grocers out of business and created food deserts. It has spurred consolidation among food processors, which has slashed the share of food dollars going to farmers and created dangerous bottlenecks in the production of meat and other essentials. And in a perverse twist, it has raised food prices for everyone, no matter where you shop.

A level playing field was long a tenet of U.S. antitrust policy. In the 19th century, Congress barred railroads from favoring some shippers over others. It applied this principle to retailing in 1936 with the Robinson-Patman Act, which mandates that suppliers offer the same terms to all retailers. The act allows large retailers to claim discounts based on actual volume efficiencies but blocks them from extracting deals that aren’t also made available to their competitors. For roughly four decades, the Federal Trade Commission vigorously enforced the act. From 1954 to 1965, the agency issued 81 cease-and-desist orders to stop suppliers of milk, tea, oatmeal, candy and other foods from giving preferential prices to the largest grocery chains.

As a result, the grocery retailing sector was enviable by today’s standards. Independent grocery stores flourished, accounting for more than half of food sales in 1958. Supermarket chains like Safeway and Kroger also thrived. This dynamism fed a broad prosperity. Even the smallest towns and poorest neighborhoods could generally count on having a grocery store. And the industry’s diffuse structure ensured that its fruits were widely distributed. Of the nearly nine million people working in retailing overall in the mid-1950s, nearly two million owned or co-owned the store where they worked. There were more Black-owned grocery stores in 1969 than there are today.

Then, amid the economic chaos and inflation of the late 1970s, the law fell into disfavor with regulators, who had come to believe that allowing large retailers to flex more muscle over suppliers would lower consumer prices. For the most part, the law hasn’t been enforced since. As a top Reagan administration official explained in 1981, antitrust was no longer “concerned with fairness to smaller competitors.”

This was a serious miscalculation. Walmart, which seized the opening and soon became notorious for strong-arming suppliers and undercutting local businesses, now captures one in four dollars Americans spend on groceries. Its rise spurred a cascade of supermarket mergers, as other chains sought to match its leverage over suppliers. If the latest of these mergers — Kroger’s bid to buy Albertsons — goes through, just five retailers will control about 55 percent of grocery sales. Food processors in turn sought to counterbalance the retailers by merging. Supermarket aisles may seem to brim with variety, but most of the brands you see are made by just a few conglomerates.

These food giants are now the dominant buyers of crops and livestock. The lack of competition has contributed to the decline in farmers’ share of the consumer grocery dollar, which has fallen by more than half since the 1980s. In the absence of rivals, food conglomerates have over time increasingly been able to raise prices and as a result have reported soaring profits over the past two years. Inflation gives them a cover story, but it’s the lack of competition that allows them to get away with it. Meat prices surged last year among the four companies that control most pork, beef and poultry processing. Companies like PepsiCo and General Mills have also jacked up prices without seeing any loss of sales — a sure sign of uncontested market power.

This has resulted in an ever-worsening cycle: As a system dominated by a few retailers lifts prices across the board — even at Walmart — consumers head to those retailers because of their ability to wrest relatively lower prices or simply because they’re the only options left. Walmart’s share of grocery sales swelled last year as more people flocked to its stores.

Meanwhile, the decline of independent grocers, which disproportionately serve rural small towns and Black and Latino neighborhoods, has left debilitating gaps in our food system. If Food Fresh were to close, residents of Evans County, where the store is, would have to subsist on the limited range of packaged foods sold at a local dollar store or drive about 25 minutes to reach a Walmart. (Nearly a quarter of Evans County residents live in poverty.) Living without a grocery store nearby imposes a daily hardship on people and could lead to an increased risk of diabetes, heart disease and other diet-related illnesses.

Losing small retailers also stifles innovation. New food companies rely on independent retailers to introduce products. But as this diversity of retailers gives way to a monocrop of big chains, start-ups have fewer avenues to success. This results in diminished selection for shoppers, who find store shelves stocked with only what the big food conglomerates choose to produce.

We need to stop big retailers from using their enormous financial leverage over suppliers to tilt the playing field. By resurrecting the Robinson-Patman Act, we could begin to put an end to decades of misguided antitrust policy in which regulators abandoned fair competition in favor of ever-greater corporate scale. There is promising momentum. Last year an unusual coalition of Democratic and Republican lawmakers sent a letter to the F.T.C. urging it to dust off Robinson-Patman. The agency began a broad inquiry in late 2021 into grocery supply issues, which could uncover evidence of price discrimination. This year the agency opened investigations into soft drink and alcohol suppliers for possible violations of the act.

These moves are already drawing fire from an old guard locked in bigger-is-always-better thinking. Jason Furman, a Harvard economist who served as a top adviser to President Barack Obama, tweeted recently that some of the views calling for a reset of our antitrust policies often seem “grounded less in consumer welfare and more in a view that everyone should be shopping at expensive craft boutiques.” But that’s not the story in places like Evans County. In the early days of the pandemic, as Walmart and Amazon compelled manufacturers to steer scarce supplies their way and worsened shortages at local grocers, Mr. Gay worked long days hustling to find alternate sources.

“My meat is fresher,” he said. “My produce is fresher. My customer service is better. Imagine if you made the playing field level. Imagine what I could do.”

Stacy Mitchell is an executive director of the Institute for Local Self-Reliance and the author of “Big-Box Swindle.”

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

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from "price" - Google News https://ift.tt/mqGrZgv
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