One of the reasons as an investor you want to buy dividend stocks is because they have the ability to raise prices. If prices are rising all and sales continue on the same path, revenues should be higher. Raising prices is more of an art than anything else because companies need to ensure the value the consumer believes is in the price, stays with a higher price. If the item was in the luxury category, it is easier to raise prices. If the company competes on price, then raising prices is much harder to do.

In an article by Madelline Ngo of The New York Times News Service, when grocers raised their prices were they price gouging? The Federal Trade Commission (FTC) wrote a report saying large US grocery retailers took advantage of supply chain disruptions to beat out their smaller rivals and protect their profits during the pandemic.

During the pandemic, many places were closed which changed the normal supply chain operations. The FTC noted some large firms pressured suppliers to supply them first over competitors. Food and beverage retailers posted strong profits during the height of the pandemic and continue to do so today. The prices that were pushed up during the pandemic have remained even though the supply system has been fixed.

Small grocers had a problem getting supplies during the pandemic. Large companies not so much.

Using public data on profits in the grocery retail industry, the FTC found that in the first 3/4s of 2023, food and beverage retailer revenues reached 7% over total costs. That was up from 6% om 2021 and 5.6% in 2015.

Food costs affect everyone which in an election year makes it an election issue. Besides food costs the potential $25 billion merger of Kroger and Albertsons is held up.

Linking to dividend paying stocks, one hand as an investor you like the fact that some companies can increase their prices, on the other hand if you are a consumer, you like it less. In many areas of the world, the idea of having or achieving a balance is important. Perhaps the dividend increases and the increase in the stock price more than pays for the increased consumer prices.

There are more questions than answers, till the next time – to raising questions.