Recently a story about the compensation paid to the CEO of Kroger was headlined. His pay had been reduced from 2022 to 2023 by18% to only $15.5 million. This reduction occurred because Kroger sales growth “slowed”. It did not decrease. There were other stats in the story like the CEO’s pay was 502 times the average Kroger worker pay. But the stat that we noticed is the gross profit margin. In 2023 the gross margin was nearly 1.5%. Anyone who knows the grocery business knows that the industry average has always been around .5%. So in a year where margin tripled, the CEO’s paycheck was penalized. Think about it. If you were the CEO what would you be encouraged to do? Yes, you’d want to increase sales. and, how would you do that ?….by increasing prices!!! So maybe we have a situation here where all food industry retailer CEO’s are being encouraged to post higher sales numbers. Does that suggest food at inflated prices? Watch the register tape when you buy food and ask yourself if price “creep” is at work. We think inflated prices were present last year because everyone was focused on inflation and the Krogers of the world capitalized on being just another example of high costs. Did they?
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