It is ridiculous and in fact they should lower their prices...there is no reason for the Amazon increases including charging for delivery from Whole Foods. Starbucks is already so expensive I don't buy coffee there anymore, so I can't believe they are having upcoming price increases.
I've always found it unsettling how media outlets will go to bat for big companies, rather than their readers.
But I do think something is missed by only looking at current profits as a metric of whether a company should raise prices. This is because past profit is not a guarantee of future profit.
One example that comes to mind is a local tent making company. Normally they make large outdoor tents for ceremonies, weddings, etc. But during the summer of 2020, orders started flooding in from restaurants. It was a hugely profitable year for them, but it was driven by unique circumstances.
You could also make the argument Amazon profited due to a unique set of circumstances. I don't like Amazon. I don't have an Amazon membership, but I can clearly see that shutting down stores and forcing people to order things online creates circumstances that benefit Amazon.
I like to look at the producer price index. I.e. how much it cost the company to make the thing they're selling you. If the producer price index matches the consumer price index, (which they pretty much do right now,) that means price hikes are proportionate, and the stores aren't making any more money off you.
I actually think your article leads to an interesting question if we consider all this: Do large companies have some kind of obligation to operate at a loss until their past profits diminish? What would the implications of this be?
It is ridiculous and in fact they should lower their prices...there is no reason for the Amazon increases including charging for delivery from Whole Foods. Starbucks is already so expensive I don't buy coffee there anymore, so I can't believe they are having upcoming price increases.
I've always found it unsettling how media outlets will go to bat for big companies, rather than their readers.
But I do think something is missed by only looking at current profits as a metric of whether a company should raise prices. This is because past profit is not a guarantee of future profit.
One example that comes to mind is a local tent making company. Normally they make large outdoor tents for ceremonies, weddings, etc. But during the summer of 2020, orders started flooding in from restaurants. It was a hugely profitable year for them, but it was driven by unique circumstances.
You could also make the argument Amazon profited due to a unique set of circumstances. I don't like Amazon. I don't have an Amazon membership, but I can clearly see that shutting down stores and forcing people to order things online creates circumstances that benefit Amazon.
I like to look at the producer price index. I.e. how much it cost the company to make the thing they're selling you. If the producer price index matches the consumer price index, (which they pretty much do right now,) that means price hikes are proportionate, and the stores aren't making any more money off you.
I actually think your article leads to an interesting question if we consider all this: Do large companies have some kind of obligation to operate at a loss until their past profits diminish? What would the implications of this be?
Interesting read!