Warren, Mass. Dems echo Stop & Shop price gouging allegations
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Shoppers, consumer advocates and some top Massachusetts lawmakers want answers from Stop & Shop over allegations the grocery giant inflates prices for food in lower-income neighborhoods.
Why it matters: Shoppers already face rising food prices. If the company is charging less in richer areas and more where consumers are poorer, it could disproportionately burden households struggling to make ends meet.
- The controversy could also lead to price-gouging charges and severely damage the chain's reputation.
Driving the news: A 2023 study conducted by a Boston volunteer youth group found that Stop & Shop charged 18% more for groceries in working-class and largely non-white Jamaica Plain than in the more affluent Dedham suburb seven miles away.
- The Hyde Square Task Force's sample shopping cart cost $34 more in JP than in the suburb.
- Items like Bubba's turkey burgers were $11.49 in JP but $9.49 in Dedham. French fries were nearly a dollar more in the JP store and bacon cost two dollars more in JP.
- A Boston Globe report this week corroborated that the Dedham store has mostly cheaper prices.
Caveat: The youth group only surveyed the JP and Dedham Stop & Shop locations, so their sample is a bit limited.
The other side: Stop & Shop says it doesn't consider a neighborhood's socioeconomic makeup when setting prices.
- Factors like property costs, labor costs and the size of the store are the key factors that affect Stop & Shop prices, according to the company.
- Stop & Shop says it has a multiyear strategy to lower prices and has already done so for thousands of products in New England stores.
The intrigue: Now, U.S. Sens. Elizabeth Warren and Ed Markey, as well as U.S. Reps. Jim McGovern and Ayanna Pressley, are demanding that Stop & Shop's parent company's CEO explain how exactly prices are set location to location.
What they're saying: "It is shameful that Stop & Shop appears to be engaging in corporate profiteering schemes that squeeze residents and families in Massachusetts," the lawmakers wrote in their letter to Frans Muller, CEO of chain owner Ahold Delhaize.
Context: Stop & Shop is closing eight locations in Massachusetts that the chain considers "underperforming."
What's next: The Democrats gave Stop & Shop until Oct. 14 to clarify its pricing policies.
Between the lines: The letter from the Democrats comes over a year after the Hyde Square Task Force initially made its accusations and right as one of the nation's leading consumer advocates, Warren, is running for re-election.
- Warren has recently railed against another grocery giant, Kroger, for partnering with an artificial intelligence company to set dynamic prices for food.