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Senators: “Corporate profits must not come at the expense of people’s ability to put food on the table.”
October 23, 2024 - Washington, D.C. – On Tuesday, U.S. Senators Elizabeth Warren (D-Mass.), Bob Casey (D-Pa.), and Ron Wyden (D-Ore.), wrote to President and Chief Executive Officer of McDonald’s, Chris Kempczinski, pushing for more information on McDonald’s pricing decisions as fast food prices continue to increase, outpacing inflation and squeezing customers.
“While McDonald’s is not the only fast food restaurant that has increased prices significantly in recent years, its dominant market position as the largest fast food chain in the United States has an outsize impact on American consumers. While working families are trying to make ends meet, McDonald’s and its corporate counterparts have continued to grow their profits,” wrote the senators.
Earlier this year, McDonald’s USA President Joe Erlinger attempted to blame the company’s menu price increases on inflationary pressures and input costs, but the data tells another story. Since the COVID-19 pandemic, fast food prices have consistently outpaced inflation, and since 2020, overall inflation has increased by 20 percent, while McDonald’s has increased its menu prices for several items substantially more. McDonalds net annual income rose by over 79 percent – nearly $8.5 billion, from 2020 to 2023.
While McDonald’s was raising prices, the company also spent nearly $4 billion on stock buybacks in 2022 and $3 billion in 2023. The company also benefits from a tax loophole that favors buybacks. This prioritizes Wall Street shareholders over investments in McDonald’s own business and workers.
As American consumers have begun taking their business elsewhere, the company has promised to take a “forensic approach” to evaluating high prices.
“Corporate profits must not come at the expense of people’s ability to put food on the table,” concluded the senators. “As we seek to investigate and understand the increased consumer costs in the economy, we hope McDonald’s will help us to understand why its prices have risen so high.”
As a champion for American consumers and a secure and healthy economy, Senator Warren has engaged in oversight of corporations that unfairly exploit consumers. She has also been calling for more competition and stronger enforcement of antitrust laws to bring down prices for families:
- In October 2024, United States Senator Elizabeth Warren (D-Mass.), along with Senator Bernie Sanders (I-Vt.) and Representatives Jan Schakowsky (D-Ill.), Hank Johnson (D-Ga.), Matt Cartwright (D-Pa.), Sheila Cherfilus-McCormick (D-Fla.), Rosa DeLauro (D-Conn.), Maxwell Frost (D-Fla.), Pramila Jayapal (D-Wash.), Darren Soto (D-Fla.), Mark Takano (D-Calif.), Paul Tonko (D-N.Y.), and Frederica Wilson (D-Fla.) wrote to Chair of the Federal Trade Commission, Lina Khan, on reports of widespread price gouging in states impacted by Hurricanes Helene and Milton and on the need for a federal price gouging ban to complement state-level efforts.
- In October 2024, Senator Elizabeth Warren (D-Mass.) and Representative Madeleine Dean (D-Pa.) wrote to the CEOs of Coca-Cola, PepsiCo, and General Mills, pressing their executives on the companies’ pattern of profiteering off consumers, both through “shrinkflation” and dodging taxes on the profits they made from that price gouging.
- In September 2024, U.S. Senators Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.), and Representative Seth Moulton (D-Mass.) demanded answers from 13 corporate landlords operating in Massachusetts as to whether they are using RealPage’s algorithm to raise rents for families.
- In August 2024, Senators Elizabeth Warren (D-Mass.) and Bob Casey (D-Pa.) sent a letter to Rodney McMullen, chairman and CEO of Kroger, raising concerns about Kroger’s use of Electronic Shelving Labels (ESLs) to potentially surge grocery prices and exploit consumers.
- In May 2024, while chairing a Senate Banking Subcommittee on Economic Policy hearing, Senator Warren (D-Mass.) called out giant corporations for hiking up food prices while raking in record profits, and urged action to promote competition and bring down costs.
- In May 2024, Senator Warren and Rep. Jim McGovern led a group of lawmakers in a letter to President Joe Biden, urging the Biden administration to use its executive authority to take action to lower food prices.
- In May 2024, during a hearing of the U.S. Senate Committee on Banking, Housing, & Urban Affairs, Senator Warren called out food industry price gouging and urged action to combat unfair pricing practices.
- In April 2024, Senator Warren (D-Mass.), Bob Casey (D-Penn.), and Ben Ray Luján (D-N.M.) wrote to DoorDash and UberEats, the two largest delivery platforms, calling out their use of hidden junk fees.
- In March 2024, Senator Elizabeth Warren (D-Mass.) and Representative Mary Gay Scanlon (D-Penn.) led a group of 14 lawmakers in a letter to FTC Chair Lina Khan urging the agency to revive enforcement of the Robinson-Patman Act (RPA), a critical tool to promote fair competition in the food industry.
- In February 2024, Senator Warren joined Senator Bob Casey (D-Pa.) in introducing the Shrinkflation Prevention Act to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering prices.
- In February 2024, Senators Warren, Baldwin, Casey, and U.S. Representative Jan Schakowsky (D-Ill.) reintroduced the Price Gouging Prevention Act of 2024, which would protect consumers and prohibit corporate price gouging by authorizing the FTC and state attorneys general to enforce a federal ban against grossly excessive price increases.
- In February 2022, at a hearing, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits.
- At a January 2022 hearing, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
- In a New York Times op-ed published in April 2020, Senator Warren urged Congress to focus on cracking down on price gouging in its ongoing effort to address the impact of the coronavirus pandemic.
Source: Senator Elizabeth Warren
