crs_reports: R48916

Congressional Research Service reports with summaries, authors, and topic classifications.

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R48916 Retailer Inventory and Pricing Behavior During Supply Chain Disruptions 2026-04-23T04:00:00Z 2026-04-25T13:37:57Z Active Reports Michael Alan Havlin, Clare Y. Cho   Recent supply chain disruptions have contributed to price increases for certain consumer goods, such as vehicles, groceries, apparel, and consumer electronics. Congress has expressed interest in various types of retailers that sell these consumer goods, particularly after their profits and prices have increased following supply chain disruptions. Retailers provide services to producers and consumers and charge a price for their services. One of their main services is inventory management. That is, retailers acquire, hold, and maintain goods that are for sale to consumers. A retailer’s inventory management can affect its pricing behavior, particularly during supply chain disruptions. For example, if supply chain disruptions prevent a retailer from acquiring new inventory, the retailer might choose to increase prices to potentially increase its profits, avoid selling out of a product, or both. The price of a retail service is typically the markup charged on the product—the difference between the amount a retailer pays the supplier and the amount the retailer charges the consumer. The size of a markup may vary with time, retailer type, and a variety of competitive and contextual factors. Retailer behavior can affect how supply chain disruptions transmit down to the consumer. Retailers’ responses to such events may vary by the type of retailer, type of disruption, and a variety of contextual factors, such as inventory levels, competition, retail pricing strategies, and information access. Because of these factors, changes in markups and consumer prices are not uniformly driven by supplier price changes. Retailers might increase, decrease, or maintain their markups following changes in supplier pricing. During the Great Recession, vehicle dealerships paid higher prices to manufacturers that faced tightening financial constraints but did not pass those higher costs on to consumers. In contrast, during the COVID-19 pandemic, vehicle dealerships increased markups while experiencing record low vehicle inventories. As another example, grocery stores increased markups for meats during certain agricultural supply chain disruptions. Changes in tariffs in 2025 contributed to changes in import volumes and prices paid by retailers, both of which might affect retailer behavior. How a retailer responds to a supply chain disruption can affect both its profitability and consumer prices. A retailer typically makes pricing and inventory decisions in response to market forces, such as consumer demand for its products, competitive pressure from other retailers, and the diversity of its upstream supplier network. Statute can affect retailers’ pricing behaviors within certain contexts. For example, Section 102 of the Defense Production Act of 1950 (50 U.S.C. §4512) prohibits hoarding of materials that the President has designated as scarce for the purpose of selling those goods at an elevated price. No federal laws or regulations explicitly prohibit price gouging, a term often used to describe price increases perceived to be excessive, typically in response to sudden changes in supply or demand (e.g., caused by a supply chain disruption). Price gouging bills introduced by Members of the 119th Congress and state price gouging laws often have focused on supply chain disruptions or other market shocks. Congress might consider using its oversight authority to ask federal agencies to take actions to enforce existing laws that can affect pricing during supply chain disruptions. Congress might consider addressing price gouging through legislation. If Members of Congress choose to introduce additional legislation related to price gouging, considerations may include the circumstances in which a price increase might be considered excessive, whether to prohibit a specific price increase in statute or direct a federal agency to promulgate regulations to define the terms excessive or price gouging, and whether to prohibit price gouging in specific contexts or for certain goods. Congress also might consider legislation addressing supply chain resiliency. One option that Congress might consider is to direct research to identify industries to build supply chain resiliency and support domestic production of certain goods. The House and Senate passed their respective versions of a Promoting Resilient Supply Chains Act of 2025 (H.R. 2444; S. 257), which would direct the Assistant Secretary of Commerce for Industry and Analysis to lead and establish an intergovernmental working group to develop plans and analyses to increase U.S. supply chain resiliency for industries and goods critical to U.S. economic or national security. https://www.congress.gov/crs_external_products/R/PDF/R48916/R48916.2.pdf https://www.congress.gov/crs_external_products/R/HTML/R48916.html

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