As corporate profits reach record high, Iron Mountain executive tells Wall Street inflation is great

Same, while I don’t have any quotes from their CEO as proof, I’ve stopped shopping at Publix based on the same suspicions. $300+ for a family of four is absurd. I can get the same groceries at Aldi and/or Lidl for around $175. I’ve felt Publix was guilty of hiding behind inflation and rising wages to raise their prices to unnecessarily high levels as well. I get supply chain, gas, wage increases will require some increase, but not the percentages they’ve gone too.

 

For a CEO, he seems to have a pretty unsophisticated view of how money works. He apparently is looking at revenue as the most important metric, but anyone who understands money knows that net income is far more important. Unless he somehow manages to be insulated from inflation on his expenses like labor, material, lease, services, etc then the higher gross revenue is washed out by the higher expenses. Not only that, but as a consumer with his presumably higher paychecks, he will pay more for the things he purchases, and will end up giving that extra money back. During high inflation, your buying power is actually less than it typically would be relative to normal economic conditions.

 

Well their stock is trading sideways over the last year so….

Co-Founder Glenn Greenwald's Accusations of Bias
In Oct. 2020, Intercept co-founder Glenn Greenwaldresigned from the publication, accusing it of censorship and bias in an open letter. The Intercept responded with a statement denying the allegations. Greenwald wrote in part:

"The final, precipitating cause [for my resignation] is that The Intercept’s editors, in violation of my contractual right of editorial freedom, censored an article I wrote this week, refusing to publish it unless I remove all sections critical of Democratic presidential candidate Joe Biden, the candidate vehemently supported by all New-York-based Intercept editors involved in this effort at suppression. ... "I had no objection to their disagreement with my views of what this Biden evidence shows: as a last-ditch attempt to avoid being censored, I encouraged them to air their disagreements with me by writing their own articles that critique my perspectives and letting readers decide who is right, the way any confident and healthy media outlet would. But modern media outlets do not air dissent; they quash it. So censorship of my article, rather than engagement with it, was the path these Biden-supporting editors chose."

Greenwald went on to accuse The Intercept's "current iteration" "completely unrecognizable" compared to its original vision. He wrote:

"Rather than offering a venue for airing dissent, marginalized voices and unheard perspectives, it is rapidly becoming just another media outlet with mandated ideological and partisan loyalties, a rigid and narrow range of permitted viewpoints (ranging from establishment liberalism to soft leftism, but always anchored in ultimate support for the Democratic Party), a deep fear of offending hegemonic cultural liberalism and center-left Twitter luminaries, and an overarching need to secure the approval and admiration of the very mainstream media outlets we created The Intercept to oppose, critique and subvert." "It is even rarer for The Intercept to publish content that would not fit very comfortably in at least a dozen or more center-left publications of similar size which pre-dated its founding, from Mother Jones to Vox and even MSNBC."

 

Killing inflation the Fed's way is also great for them, almost like this country is rigged

 

We've been done with Publix for a while now. Still get meats on sale there but otherwise they have lost their minds for what they charge for basics you can get elsewhere. Even their cheap low quality generic bread is a dollar more than what you can find at other stores.

People are creatures of habit though and others just need to shop at Publix for status reasons. There was a time Publix was known for quality AND fair prices. When I was in college in the 90s shopping at Publix was as affordable as anywhere else. Now not so much

 

In the article he states inflation is an opportunity expand their margins so while he may be subject to inflation costs himself, he's also talking about driving profits and margins even higher.

 

Or if he raises prices more than inflation?

 

Corporate Profits After Tax (without IVA and CCAdj)/Gross Domestic Product | FRED | St. Louis Fed

That article had an agenda. They took one company who benefits from inflation, then took a stat out of context 8% vs 5% long term average, but failed to mention corporate profits were even higher before the inflation going higher than 10% most of the last decade.

What generally benefitted corporations was loose money and low interest rates. The last couple of years until recently you had loose money and low interest rates. As long as inflation is higher than interest rates it doesn’t hurt as bad, because they were locked into low interest debt with high inflation. But as interest rates catch up and slow the economy it will likely reverse.

 

True, but you can raise your prices higher than inflation at any level of inflation. You don’t need record high inflation to raise your prices higher than inflation.

 

Right, but when you do that in normal times, customers get mad at you and you pay a price in customer satisfaction and possibly even brand loyalty. When you do it during high inflation, customers get mad at Biden.

Kind of like how when there are news stories about how the price of crude oil is rising, gas prices go up even though those higher prices from the crude haven't worked their way through the system yet. The gas at the pump is still cheaper in cost to the gas stations, but they can get a little more profit without paying any price in customer satisfaction, because the customers know that oil prices are going up so gas is going to be more expensive.

 

I understand your point, but I think anytime prices go up drastically, whether in periods of normal or high inflation, people tend to blame the President. When companies get in trouble is when it is discovered that they are raising prices arbitrarily like this CEO just admitted to. As you alluded to above, whole sectors can also come under fire, such as the oil industry or airlines.

 

Foolish statement for this CEO to make, and can only make it because of the nature of his business. This is not so for most companies so those of you with suspicions of this being widespread should probably cool off on that.

I’ve always considered Publix in the “you get what you pay for category”. Their unit prices might be a little higher than some but you can walk in knowing ( in normal times) that the store will be clean, well managed, and that they will have several choices on whatever you want. Their store brand items are generally of very good quality.

 

Does he even realize that his financial inflation gains are worth less during high inflation years? His money gains are devalued because of inflation.

 

The quality issue only goes so far though once prices get absurd. I still prefer to buy meat at Publix if on sale because of their quality control but paying almost twice the price for non perishable items isn't justified for many any longer. We now coordinate our trips. Aldi is limited but if we plan appropriately we save considerable amounts by shopping for produce at a local produce market, Aldi, Bjs and for occasional items at Publix. I'm talking spending half as much on produce, dairy and some meats at Perrines than we would at Publix.

 

Agree 100%. There are certain things that just don’t need to cost more. Meats, sure, they do a lot of the butchering in house and they’re actually doing work to justify the price. Boarshead meats? No need to charge $2 a pound more than other grocery stores that sell the exact same meat. Rather than spend $14 a pound on turkey, I started making my own. A 3lb frozen butterball turkey breast used to be $12 its now $13 at Kroger, ok,fine, it’s now $18 at Publix. Bought one at Aldi yesterday for $11.

 

Aldi sells butterball? I always thought they stuck to generics

 

It is a generic, my apologies if I was unclear. I have read that their chicken is private labeled from Tyson. Wouldn’t be surprised if their turkey is butterball.