The Federal Trade Commission is asking nine major retailers to help it investigate the causes of the supply chain crisis.
Using its jurisdiction outlined in Section 6(b) of the FTC Act, the agency is ordering Walmart Inc., Amazon.com Inc., Kroger Co., C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc. Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. to turn over information that will help explain the supply chain crisis that is impacting all levels of the consumer economy.
Port congestion, factory shutdowns and labor shortages are all a part of a global supply chain crisis that has slammed many retailers this holiday season. In some cases, the delays are putting certain brands and retailers in jeopardy of missing crucial inventory targets, which has prompted many to order more product earlier in advance.
The FTC investigation will attempt to determine how supply chain issues are causing shortages and rising prices in stores and will review how products within each company are obtained, transported, and distributed. The agency is also asking retailers to turn over internal documents related to how they are handling supply chain disruptions in terms of pricing and allocation.
Each company has 45 days to respond to the query for information.
“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new 6(b) study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” said FTC chair Lina M. Khan in a statement. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”
Despite supply chain slowdowns, Walmart posted a 9.2% year over year sales growth in US stores open for at least a year in its third quarter earnings report. The company said it benefitted from higher prices in an inflationary environment as well as government stimulus payments.