A feature at WRAL by “Smart Shopper” author Faye Prosser discusses the rising price of eggs right now, and in so doing, it shows serious problems with the anti-“price gouging” law.
On March 30, a WRAL viewer in Zebulon, who prefers to remain anonymous, asked WRAL about the higher price of eggs at his local Carlie C’s this week. He wrote, “Price of a dozen Green Valley eggs has gone from $.99/dozen to $2.89/dozen. I normally shop at Carlie C’s grocery in Zebulon. That’s a 200% increase on pre-Corona prices. Corporate Carlie C’s says just supply and demand but anti-gouging laws should prevent this. The disadvantaged depend on this economical food source.”
This is where most reports on “gouging” end. Prosser’s report, however, uses it as the starting point:
When we reached out to Carlie C’s, they responded quickly with specific reasons for the price increases shoppers are seeing at their stores, and many other grocery chains right now.
A representative from the Carlie C’s corporate office shared, “Eggs are a commodity and have gone up in price from suppliers. Here is what we paid per week for eggs this month. We are selling eggs for less than what we paid for them.”
March 2: $0.90
March 9: $0.97
March 16: $1.49
March 23: $2.28
March 30: $2.96
The Carlie C’s representative indicated that a dozen large eggs cost them $2.96 this week from their supplier and, at the time this article was written, they were selling the eggs for $2.89. That is a 7-cent loss on every carton they sell.
This is one of the best articles I’ve read in the local press on the subject. It takes into account the prices faced by retailers and the economic realities everyone is having to face. To me, one of the unfortunate side effects of anti-“gouging” laws is the suspicion it fosters between natural allies: buyers and sellers.
If someone snitched to the Attorney General on Carlie C’s for tripling the price of a dozen eggs, since the Attorney General’s office is charged with enforcing the anti-“gouging” law, what would he do? I’m impressed that the story wasn’t “Grocery Store Catering to the Poor Triples Price of Eggs; Readers May Assume Malicious Intent.”
Smart job, Smart Shopper.
What you can gather from this:
- Retail businesses aren’t “gouging” if they’re paying higher prices, too (let alone that “gouging” is a politician’s term, not an economist’s)
- Those counts from the Attorney General’s office of “reported incidents of price gouging” are even more worthless — it’s bad enough it counts multiple calls about the same high price as multiple incidents of “gouging,” but worse when the retailers are merely doing with that good’s price what they do with pricing all the other goods they sell
- Retailers worried about anti-“gouging” law sometimes choose to bear the brunt of the price increases themselves (Carlie C’s is now losing 7 cents per dozen eggs sold)
- They still probably get reported to the AG’s office (a shopper that reports them to media probably also goes to the AG’s office)
Two big spikes in demand for a fixed supply
The article also got into the economics of the matter.
According to Lake Wagner, General Manager at Dutt & Wagner, “The market is something we cannot control and we have seen it reach all-time highs over the past weeks, as retail demand continues to come in at levels never before seen due to COVID-19. The first spike in demand was primarily panic driven like we would see before a major snow storm, but now with more people quarantined at home, there is more consumption taking place.” …
A Reuters article from March 26 confirms the increase in wholesale egg prices from Urner Barry: “Midwest large eggs hit an all-time high of $3.09 a dozen on Thursday (March 26), triple their level in early March, according to the Urner Barry market reporting service that provides daily monitoring of commodity egg prices.”
The article also backs up the information we are hearing from many grocery stores that they are not passing those increased costs to consumers in full. If the egg price at your local grocery store has not increased at all, it is quite possible that they are taking a substantial loss on that product in order to continue offering lower prices to their customers.
The Reuters piece offers a quote from Brian Moscoguiri, a director with Urner Barry, who shared, “People see a sharp increase in prices and assume they’re being gouged, but it’s just a function of the market,” he said. “Egg prices are up because demand is up sharply. Suppliers are seeing four, five, six times the level of demand as before, and there’s essentially a fixed supply.”
The article also goes on to discuss chicken, beef, and pork prices.
For more discussion of the anti-“price gouging” laws, see: