Biden White House applauds Walmart, Amazon for grocery discounts amid inflation fight

By Chris Matthews

Consumers remain concerned over high food prices ahead of November's election

The Biden administration is celebrating recent evidence of lower prices at the grocery store, even as it argues that some retailers are not passing along savings from falling wholesale prices to consumers.

Lael Brainard, director of President Joe Biden's National Economic Council, said in a speech Thursday that prices for commodities like wheat are down to levels not seen since 2021, and that the administration is urging retailers to lower prices in response.

"President Biden is really pushing on this, calling on grocery stores to pass those savings along," Brainard said during an appearance at the Urban Institute, a think tank.

The speech came ahead of a new report from the White House Council of Economic Advisers that showed that grocery price inflation is "way down from its recent peak," and that wage increases have helped offset the burden of higher grocery prices.

It also noted that several large grocery chains have "recently announced price cuts," including Aldi, Amazon (AMZN), Target (TGT), Walgreens (WBA) and Walmart (WMT).

The report said that Americans have seen declines in prices for apples, ham, cheese, potatoes and coffee, and more. Overall grocery prices have risen by 1% over the past year, according to the Bureau of Labor Statistics.

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"Families are still struggling with high prices, which is why we continue to push for lower costs in all the components of family budgets, including housing, health care, child care, and getting rid of junk fees," the report said. Of course, grocery prices are high on that list and it is therefore good to see relief coming in that important space."

Brainard said that grocery store profit margins remain elevated, however, and that "even though shipping costs and global food commodity prices have declined sharply, grocery prices have been slow to come down."

There is little evidence so far that these trends are registering with consumers, according to a recent survey by the University of Michigan's consumer sentiment index.

The index fell for the third straight month in a row in June, and while worries over inflation have eased somewhat, high prices remain a concern for many Americans.

The survey showed a greater share of Americans mentioning high prices as a reason for poor personal financial conditions than the month before, with middle and working-class Americans reporting the greatest strain.

Brainard praised those stores that had started to offer discounts on staples, but said there was more work to be done.

"Finally we are seeing some grocery store chains answer the president's call and lowering prices on thousands of items," she said. "Corporations need to do more to bring their prices down, and we've got to keep the pressure up."

-Chris Matthews

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06-20-24 1341ET

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