CFA News

CFA Leads Fight Against Costly Retail Regulations

In March 2023, the Federal Trade Commission (FTC) released a report accusing three national grocery retailers of exploiting pandemic-era supply chain disruptions to inflate prices and pad profits. The report suggested that large national chains leveraged their market position to impose stricter supplier demands, consolidate private label brands, and ultimately pass higher costs onto consumers—all while their profit margins remained elevated.

However, the FTC’s findings lacked crucial context. The report failed to account for real-world inflationary pressures, rising labor costs, and supply chain volatility—factors that forced businesses across industries, not just grocery retailers, to adjust pricing structures. It also ignored the role of manufacturers and suppliers in setting prices, instead shifting blame solely onto food retailers.

Connecticut Attorney General William Tong seized on this flawed report as justification to launch an extensive investigation into grocery pricing last spring. Over the summer, his office demanded detailed cost and pricing information from every major grocer in the state. Yet after months of scrutiny, no evidence of widespread profiteering was found. Rather than publicly acknowledging this, Tong is now doubling down with HB 6854—a sweeping, overreaching piece of legislation that fundamentally mischaracterizes how businesses operate in a competitive market.

The Connecticut Food Association Pushes Back

The Connecticut Food Association (CFA), which represents retailers and suppliers across the state, has been actively pushing back against this false narrative. Throughout last year’s investigation, CFA worked to ensure lawmakers and regulators understood the economic realities driving food pricing. Industry leaders met with policymakers, provided data, and challenged misleading assumptions that ignored the complex cost structures retailers must navigate.

CFA has consistently emphasized that Connecticut’s food retailers operate in one of the most competitive marketplaces in the country, where prices are dictated by consumer demand, supply chain costs and the realities of doing business—not unchecked corporate greed. Despite this, the AG’s office has continued to misrepresent standard business adjustments as predatory practices, using political rhetoric instead of economic facts to justify its overreach.

Now, HB 6854 threatens to take this misinformation a step further by granting the attorney general extraordinary authority to declare “abnormal economic disruptions” and penalize businesses for standard industry practices, such as adjusting product sizes in response to rising costs. By conflating routine business decisions with illegal profiteering, the bill introduces regulatory uncertainty, increases compliance burdens, and inserts government overreach into a functioning competitive market.

Overreach Disguised As Consumer Protection

HB 6854 builds on this misguided narrative by allowing the attorney general to unilaterally decide when economic conditions warrant government intervention in private business operations. The bill arbitrarily bundles standard industry practices—such as modifying product weight or pack sizes due to rising costs—with illegal profiteering, fundamentally mischaracterizing how businesses operate and disregarding basic economic principles.

One of the bill’s most misleading aspects is its characterization of routine packaging adjustments—often referred to as “shrinkflation”—as price gouging. Price gouging involves exploitative price hikes during emergencies, while packaging adjustments are longstanding industry practices dictated by rising production costs. By falsely equating the two, HB 6854 creates unnecessary government interference in normal business operations, adding regulatory burdens that will ultimately drive up costs for consumers.

Government Resources And Expertise Don’t Exist

Beyond its flawed premise, HB 6854 also assumes the state has the ability to effectively regulate the day-to-day pricing and packaging decisions of thousands of businesses. Even if the state had the necessary resources—such as a dedicated staff of economists, which do not currently exist—it would still be impractical to monitor and manage the diverse pricing strategies used across industries. The bill’s broad and vague language would create confusion, increase compliance costs, and introduce government micromanagement where market competition and consumer choice already serve as natural regulators.

A Fight For Economic Common Sense

HB 6854 is not about protecting consumers; it is about expanding government control over private industry. It ignores the reality that consumers hold the power in a competitive marketplace, where businesses are incentivized to keep prices fair and transparent. Regulatory overreach of this magnitude will only create unnecessary costs, reduce choices, and stifle economic activity.

The Connecticut Food Association, along with business leaders across the state, remains committed to setting the record straight. They are working to ensure that lawmakers understand the true economic forces at play and reject policies based on political theater rather than facts. Connecticut’s food retailers deserve better than another baseless witch hunt—they deserve a fair and balanced regulatory environment that acknowledges the realities of doing business in an evolving marketplace.

Original article found at Food Trade News

March 3, 2025 in CFA News

Digital Coupon Kiosks

Connecticut’s largest grocery chain, Stop & Shop, will roll out in-store kiosks by the end of the week to make digital coupons more easily accessible to all customers.

The kiosks, which the Massachusetts-based chain refers to as Savings Stations, allows customers to activate all weekly circular digital coupons and personalized offers without having access to a smartphone, internet service, or a computer. Company officials say the kiosks ensure that all customers can easily access the same savings that are available through Stop & Shop’s digital offers.

To access their digital coupons, Stop & Shop customers can either scan their GO Rewards loyalty card or enter their phone number. Customers will receive a printout of the digital coupons that have been loaded onto their loyalty card for reference while shopping. The savings will be automatically applied at the checkout when shoppers scan their loyalty card or enter their phone number.

Roger Wheeler, Stop & Shop’s president, said the kiosks are designed to “improve the shopping experience for our customers.”

“We heard from customers who felt they were missing out on valuable digital coupon savings,” Wheeler said. “The Savings Station is our response to that feedback. It ensures that our customers can easily access all of our great deals, especially during the holiday season when savings are top of mind.”

Edgar Dworsky, the founder of ConsumerWorld.org, an advocacy group for shoppers, said Stop & Shop’s kiosks make “digital coupons more accessible to everyone, including the many seniors and low-income folks who lack internet or smartphone access.”

Stop & Shop’s roll out of its Savings Stations comes as Connecticut lawmakers are considering legislation that would require grocery stores that use electronic coupons to make it easier for consumers to access them. The launch of the kiosks comes three months after Stop & Shop closed five under-performing stores in Connecticut and 32 similar locations across five states.

Stop & Shop has 83 stores in Connecticut and more than 350 locations across five states.

Wayne Pesce, president of the Connecticut Food Association, said Stop & Shop is joining other retailers who are making it easier for all shoppers to access digital coupons.

“Other retailers have some sort of program to claim savings that don’t require an individual to have a cell phone,” Pesce said.

Original article found at the New Haven Register.

February 12, 2025 in CFA News

Price-gouging and grocery shrinkflation are on the 2025 menu

In the space of 13 days starting Wednesday, the Connecticut legislature will open its 2025 season and a U.S. president will take office after promising to lower food and energy prices. President-elect Donald Trump has already backed away from his bold vow to slash grocery bills, a centerpiece of his campaign. But lawmakers in Hartford, prodded by state Attorney General William Tong, are expected to take a stab at the issue in at least two bills.

The measures, still taking shape, would have limited effect at the cash registers. Still, they might be worth trying if they can navigate past a few sticky issues.

One likely bill is a repeat of a plan Tong has put forward at least twice since the pandemic, strengthening Connecticut’s price-gouging law. It would tighten the definition of “price-gouging” and, in its main event, it would allow Tong’s office to investigate not just retailers but also companies up the supply chain including manufacturers, packagers and distributors.

The second bill would go after “shrinkflation,” that annoying trend — useful for those of us trying to lose weight — in which grocery purveyors sell us packages with less product for the same or even higher prices.

Tong’s office declined to give details of its shrinkflation bill, which it hinted at last week in a year-end report. But according to the state’s most prominent lobbyist for the grocery industry, no other state has adopted a shrinkflation law.

That doesn’t mean Wayne Pesce, president of the Connecticut Food Association, will oppose Tong’s push. It depends what it says. Obviously, Tong isn’t going to pitch a law that tells companies how many peanuts and peppermints they can put in a package. And legislators would not pass such a plan if he pushed it.

Nor will the bill likely limit changes in packaging. I for one am glad yogurt comes in 5.3-ounce containers, down from 8 ounces in my youth.

“I think it’s going to be some type of labeling transparency,” Pesce speculated as we talked about it late Tuesday, the night before the start of the legislative session.

We of course already have most grocery items labeled by the package price and the price per pound, or ounce. Could Tong suggest labels announcing anytime a product shrinks it package size? One worry, Pesce said, is that manufacturers could be forced to label goods for Connecticut separately, which could raise cost.

We will just have to wait and see. For now, it’s clear that customers are pushing back, buying more house brands and punishing whole categories such as salty snacks, which could help our collective health.

The bill tightening up Connecticut’s price-gouging law, which applies to all sorts of products, would not, for now, change one fundamental reality: The law applies only in times of emergency or during a disaster.

A state emergency lasted more than two years during and after the COVID-19 pandemic, when accusations of price-gouging were rampant.

“Price gouging at the retail level has been illegal in our state since 1986. Unfortunately, certain select bad actors will take advantage in a crisis, like the pandemic, and charge amounts they would never be able to obtain under normal circumstances,” Tong told the legislature’s Judiciary Committee as it considered that year’s version of the bill in 2022. “The current law presumes that the only bad actors are retailers. In fact, the opposite is true.”

The measure made it through the state House in 2021 but never came to a vote in the Senate. In 2022, it stalled in the Judiciary Committee amid opposition from folks in the energy industry. In 2023, it was removed from a larger consumer bill.

In 2024, similar language was part of a bill proposed by Sen. Bob Duff, D-Norwalk, the Senate majority leader. Again, it did not pass.

You get the idea. These proposals have significant opposition for two reasons. The first is philosophical, largely from Republicans who tend to oppose meddling in markets.

The second is practical: In an era of global transactions with real-time pricing and complex supply chains — think airline fares, gasoline prices and hotel rates — regulating anything related to how much we consumers pay can be a logistical nightmare.

As one fuel oil dealer testifying against the gouging bill said in 2022, who’s going to say what is price gouging when suppliers change prices as often as three times a day?

The bill would only give Tong the right to investigate up the supply chain. Pesce, the food association president, isn’t against that idea, depending on the exact language.

“Any retailer or any seller of any good that takes advantage of consumers during times of hardship deserves whatever penalty is on the books,” he told me. “When we’re on the wrong side of consumers, we’re on the wrong side of an issue.”

As recently as last spring, Tong took action on complaints of price-gouging by grocery retailers, after a Federal Trade Commission report accused some national stores — most not operating in Connecticut — of unfair pricing. Lawmakers were still seeing dramatic price hikes, which, Duff said to me this week, “wasn’t just inflation.”

The attorney general demanded and received pricing information from grocers across the state. Since he took no public action, we can assume what he found was kosher, or at least, not the fault of retailers, just as he said in 2022.

“There was a lot of smoke and not a lot of fire in terms of that investigation,” Pesce, whose association represents companies throughout the supply chain, said.

“We support common sense legislation around price gouging, around shrinkflation.” But he added, “I don’t believe they have the bandwidth to really get to the crux of the problem.”

By that he means energy prices, labor shortages and transportation costs. That’s the problem with any government effort to control prices. It’s either ineffective window dressing or it dives into the impossibly swirling waters of the economy, where laws can have all sorts of unintended consequences and where megatrends, not meddling move, are what matter.

It’s a noble debate and it might lead to new ideas that work. Still, it’s a lot easier for the government to raise fees than to lower market prices.

Original article found at Stamford Advocate.

January 13, 2025 in CFA News

Navigating The Inflationary Tide: How Connecticut Food Retailers Adapt in Political Headwinds

Amid an unrivaled inflationary environment that has sparked debate at both federal and state levels, Connecticut grocers have come under unwarranted scrutiny from the state’s Senate Democratic leadership and attorney general following a relatively uneventful 2024 legislative session. With pressure mounting from national polls, some elected officials are scrambling to address the root causes of inflation, aiming to alleviate consumer angst over higher food costs attributed to government policies. However, their investigation is focused solely on the state’s food retailers and has warranted industry indignation regarding the broader context of inflation and the efficacy of government intervention to mitigate rising food prices.

During the pandemic, surge buying, labor shortages, production facility closures, and supply chain disruptions collectively contributed to increased costs across multiple economic sectors. In response, the federal government implemented substantial stimulus measures aimed at bolstering the economy by injecting almost six trillion dollars into the U.S. market. From my perspective, although not that of an economist, paying people to stay home and artificially inflating incomes invariably leads to inflation. Despite these factors, some political leaders seem inclined to scapegoat food retailers rather than address the underlying causes of runaway inflation.

Connecticut Attorney General William Tong’s current investigation into “potential” grocery store price gouging exemplifies this misguided government focus. Following an April Federal Trade Commission (FTC) report that found grocery store prices remained elevated even as the pandemic ended and inflation cooled, Tong announced his office would investigate whether grocery stores in Connecticut have been engaging in price gouging. The FTC’s report examined national grocery chains like Walmart, Kroger, and Amazon and found that revenues and profits continued to rise after the pandemic disruptions, casting doubt on assertions that rising grocery store prices merely reflect retailers’ rising costs.

Seizing on the FTC report and White House talking points, Senate Majority Leaders Martin Looney and Bob Duff, along with several Senate Democrats, supported the Connecticut AG’s inquiry, citing the FTC’s findings that grocery prices “might be” artificially high due to corporate opportunism. Many local observers quickly pointed out that this approach is fundamentally flawed in its belief that food prices begin and end at the checkout register. The Connecticut Food Association along with multiple news editorials around the state pushed back, emphasizing that inflation is a multifaceted problem influenced by global supply chains, energy costs, and international economic policies and that the rise in food prices is no higher than increases in the restaurant, entertainment, healthcare, automotive, home improvement, insurance, and banking sectors. Bottom line: inflation has affected the cost of everything consumers purchase.

Elected officials are ignoring broader economic factors by focusing narrowly on local retailers while unfairly blaming local and regional businesses. This not only fails to address the root causes of inflation but also risks damaging the reputation of food retailers who are themselves struggling with increased costs. Yet some political leaders in D.C. and Connecticut are fixated on grocery stores, using them as convenient targets for political gain rather than addressing the macroeconomic issues that drive food prices. Ultimately, the current scrutiny of Connecticut’s grocers appears to be more of a political maneuver than a genuine effort to tackle inflation. I’m curious to see how interested these same political opportunists are after state and national elections in November.

Original article found at Food Trade News.

July 30, 2024 in CFA News

Study: If You Let People Buy Beer at Grocery Stores, the Liquor Stores Still Survive

Repealing “blue laws” and allowing Sunday alcohol sales has much less of a negative effect than doomsayers predicted.

That’s according to a new research paper by Cristina Connolly and Alyssa McDonnell of the University of Connecticut, Marcello Graziano of the Norwegian University of Science and Technology, and Sandro Steinbach of North Dakota State University. The study, published in the Journal of Wine Economics by Cambridge University Press, “examine[d] the impact of repealing Sunday blue laws on alcohol sales and retail competition, focusing on Connecticut’s 2012 policy change allowing Sunday beer sales in grocery stores.”

Connecticut repealed its long-standing prohibition on Sunday alcohol sales in 2012—more than a century after the law was introduced and three decades after the Connecticut Supreme Court deemed most of the state’s other Sunday sales prohibitions unconstitutional. Liquor stores would also be allowed to open on Sundays, in addition to letting grocery stores sell beer on that day.

The repeal of blue laws is not without its critics. According to the Massachusetts Institute of Technology’s MIT Tech Talk newspaper, a 2008 study found that “repealing America’s blue laws not only decreased church attendance, donations and spending, but it also led to a rise in alcohol and drug use among people who had been religious.”

Connecticut’s repeal was opposed at the time by liquor store owners themselves, who expressed concern about everything from the “social costs” of more alcohol sales to the extra expense incurred from being open an extra day.

“Proprietors of liquor stores in Connecticut and store association lobbyists claimed that allowing Sunday sales would negatively impact their livelihoods,” write the authors of the new study. “Not only would they need to pay operating costs for an extra day of the week, but there was also a concern that consumers would shift to purchasing beer at grocery stores as Sunday is one of the most popular grocery shopping days. Specifically, Connecticut’s liquor store association claimed that, as a direct result of this policy, liquor stores would lose sales and reduce employment, or close.”

The authors examined Connecticut’s sales figures for grocery and liquor stores both before and after the repeal, using other states without Sunday alcohol laws as a control group. They found “no evidence of negative impacts on beer sales in liquor stores.”

“Despite repeated claims by liquor store associations,” the report concludes, “repealing these laws did not harm liquor stores, suggesting that it is possible to repeal Sunday blue laws without negatively impacting smaller businesses.” Incidentally, the study also contradicted claims by grocery store lobbyists, who said Sunday alcohol sales would “have large, positive economic impacts.”

The same data also provides comfort for those who worry that being able to buy alcohol one additional day per week would lead to an explosion in alcoholism and addiction. “Our estimates indicate that repealing these laws significantly increased beer sales at grocery and liquor stores directly after the policy shift, but these effects disappeared afterward.”

“There is an initial bump in sales, possibly due to the novelty of the policy,” they found. “This impact levels off after the initial month, with no discernible effect on sales after the seventh week.”

As it turns out, the repeal benefited both consumers and vendors while proving the doomsayers wrong. But it was also a net positive for economic liberty as another piece of Prohibition falls by the wayside.

Original article found at Reason.

February 6, 2024 in CFA News

Food Inflation Finally Easing

That said, the CPI for other food products remained elevated. Cereals and bakery rose 0.6% in the same time frame, while the nonalcoholic beverage category ticked up 0.2%. The index for the “other food at home” category edged 0.4% higher.

(more…)

April 17, 2023 in CFA News