Food prices are soaring, and so are companies’ profits

Some firms and restaurants have continued to raise prices for consumers even after their own inflation-related costs have been covered

- ISABELLA SIMONETTI JULIE CRESWELL

A year ago, a bag of potato chips at the grocery store cost an average of $5.05.

These days, that bag costs $6.05. A dozen eggs that could have been picked up for $1.83 now average $2.90.

A two-litre bottle of soda that cost $1.78 will now set you back $2.17.

Something else is also much higher: corporate profits.

In mid-October, PepsiCo, whose prices for its drinks and chips were up 17 per cent in the latest quarter from year-ago levels, reported that its third-quarter profit grew more than 20 per cent.

Likewise, Coca-Cola reported profit up 14 per cent from a year earlier, thanks in large part to price increases.

Restaurants keep getting more expensive, too.

Chipotle Mexican Grill, which said prices by the end of the year would be nearly 15 per cent higher than a year earlier, reported $257.1 million in profit in the latest quarter, up nearly 26 per cent from a year earlier.

Although food companies are prominent examples of how rapid inflation is being passed from producers to consumers, the trend is evident across a wide variety of industries.

Executives from banks, airlines, hotels, consumer goods companies, and other firms have said they are finding that customers have money to spend and can tolerate higher prices.