How Inflation Made Public Groceries Inevitable. (Extended Version With Citations)

Errol Schweizer

Introduction: Inflation Accomplished

Unintentionally doing his best GW Bush “mission accomplished” shtick, sans aircraft carrier, President Donald Trump recently declared that he’s “already solved inflation”, that “costs are down” and ”We have almost no inflation anymore.”

Leaving aside the obvious to anyone who buys food, that all of these statements were inaccurate, typically Trumpian hyperbole, they were consistent with Trump’s 2024 presidential campaign braggadacio that tapped a motherload of voter anxiety about Biden economics. “Starting the day I take the oath of office, I will rapidly drive prices down and we will make America affordable again. We’re going to make it affordable again.”

But there is no art of the deal for Trump to charm food prices back down. His reversal of reciprocal tariffs may slow their overall assent, and definitely won’t help his reputation for “TACO”. The Trump economy is now even more unaffordable than his predecessor’s. Trump not only does not have a plan to bring prices down, but his policies are actively driving them up. If there are policy solutions to make food affordable again, they won’t be found in the Trump White House. But they exist, and they work.

1-Inflation Reigns.

Inflation, or the annual rate of price increases, is still in the low single digits and has slowed down considerably since peaking in 2022. During the Biden-Harris years, policymakers sat on their hands as food prices soared, delegating price stability to the Federal Reserve Bank. The Fed raised interest rates in several tranches, creating crushing household debt burdens for working people in a painful attempt to slow demand and stabilize the labor market, the gentleman’s way of saying “discipline the workforce”. This all came down just as pandemic-era benefits dried up, all while liberal pundits scolded inflation-weary consumers for complaining “vibeflation” and creating a “vibecession”. Bidenomics, despite some decent efforts around antitrust, industrial policy and corporate concentration, was not pleasant for working people, and that reflected at the polls in 2024.

Now nearly a year into office, it is getting harder for President Trump to pass the pricing buck to Biden-era policies. With prices heating up under his watch, Trump is far from the first president to break campaign promises once getting into office. But his self-absorbtion misses the bigger picture, one that is self-evident to anyone who works for a living and has to stretch that paycheck thinner and thinner every week for all of life’s necessities.

Everything is so damned expensive now.

2-Inflation Over Gross Margin.

Compared to 2021, food prices are up 25%, according to data provided by NIQ, whose syndicated data is used across the food industry to track pricing and product trends. The total units sold, on the other hand, are down 5%. In total, grocers sold over 13 billion units less than in 2021, a massive realignment of demand elasticity, not even adjusted for population. Grocery industry sales jumped almost $225 billion since the pandemic ended, but that growth is all price inflation. People are buying less food. A lot less.

This is a consistent pattern. Grocery prices outpaced the rate of inflation by several points from 2021-2023, with the gap actually growing as the CPI cooled off.

When we look further back to the pre-pandemic days of 2019, grocery prices are up over 35%. The top 10 most consumed categories, including beef, soft drinks, eggs, milk, salty snacks and coffee, have experienced an average price increase of 60% since 2019, with a 1.3% decline in unit volume. The top 25 items are up 44%, the top 100, up 36%.

What does this mean for weekly shopping trips? In 2019, a basket of the top 10 items cost $36. In 2025, $56. In 2019, a basket of the top 25 items cost $101, in 2025, $139.

In 2019, a basket of items I would buy regularly for my big monthly stock the pantry grocery shopping trip would cost $196 in NIQ data. In 2025, the same items jumped to $273, a 40% increase.

This also means that the increase in prices since 2019 is equal to or greater than the cost of doing business for most grocery stores. Grocery stores’ gross margins, are more or less the markups they take on their wholesale costs, that enable them to keep the lights on and pay for employees, rent, utilities, and taxes, and a profit margin typically ranging from 1-5%. Gross margins range from @22% for Kroger or Walmart to 36-40% for Sprouts or Whole Foods. Many convenience stores and neighborhood markets need margins of over 40% to stay in business, and typically deal with higher wholesale costs because they don’t have the negotiation leverage or advantages of scale that bigger, dominant chains enjoy due to predatory pricing and payment practices, weak antitrust regulations and massive supply chains.

In order to bring consumer prices down to 2019 levels, grocers would have to sell everything at or below their wholesale costs. The biggest mass merchant and discount grocers would be the deepest in the red, since their price increases since 2019 have been much larger than their gross margins needed to operate.

Retailers are now working harder to sell less product. They are introducing more everyday low price private labels, selectively lowering some prices and marketing the hell out of that while raising prices on “rest of store” items to make up for the markdown expenses. Or they are increasing chargebacks, fees and markdown requirements from suppliers, putting more stuff on sale, and using AI to “optimize” pricing and target specific offers and deals to price-wary customers.

But when it comes to affordability, especially compared to prices from just a few years ago, this is all just rearranging deck chairs. The grocery business, in its current incarnation and margin model, can’t solve the affordability crisis.

And so, prices still keep going up.

3-Raining Inflation.

While inflation is not as hot as 2021 and 2022, it hasn’t gone away. There are a lot of reasons for recent price increases. Beef prices went up 14% from January to August 2025 because the beef cattle herd is the smallest in 75 years, in part because of drought. Meat industry consolidation hasn’t helped that either. The price of coffee has gone up 21% in 2025 compared to 2024, because Brazilian imports like coffee began facing 50% tariffs last month, part of the Trump trade war. Vegetables had an increase of 38.9% from June to July 2025. Apple prices increased 9.6% from September 2024 to September 2025 and 26% since 2019. Tomato prices have started to jump after the end of a 30 year U.S.-Mexico trade agreement, up 4.5% after they began facing 17% tariffs in July. Wholesale vegetable prices jumped by 47% in August alone. In California’s Oxnard region, intensified ICE activity has slashed agricultural labor by 20-40%, leading to $3-7 billion in crop losses. Trump’s own Department of Labor is warning that the crackdown on immigration is creating a labor crunch in the fields that threatens the food supply. Yale Budget Lab’s estimated in August that consumers face an effective tariff rate of 18.6% that may cost them thousands of dollars a year in higher food prices. Other cost pressures will include Avian flu, plant diseases such as citrus greening, climate change and weather-related disasters and continued war and instability. Manufacturers now face rising raw material, labor, and energy costs in addition to erratic trade policy. Wholesaler and retailers have added supplier-facing service, data, operational and promotional fees, in addition to the usual avalanche of discount, rebate, chargeback, deduction, slotting and activation fees they charge suppliers, variable costs that just end up flowing downstream to end consumers. Mass market retailers, who particularly benefited from the media hysteria of inflation from 2021-2024 to post record profits, are being very circumspect about how much of that inflation they can pass through or skim extra margin off of, lest they hemorrhage shoppers. None of these macro, real-life factors will bring food prices down even a little, let alone to 2019 levels. Line just goes up.

And believing that Trump economic policies can tame inflation is akin to saying that Trump trade, food and agricultural policies, like not pursuing an antitrust case against Pepsico, cutting food safety staff, food safety surveillance programs and regular inspections of domestic facilities and imports, holding SNAP funding hostage as a bargaining chip to raise healthcare premiums, cutting regional and local food purchasing programs, cutting charitable food donations and no longer measuring food insecurity, as well as cutting SNAP-ED, will all make American healthy again. These policies are not fit for purpose. They will do the opposite of what they promise.

And meanwhile, prices keep going up.

4-Inflation Fatigue.

Not surprisingly, inflation is rated as the biggest risk to the US economy by a majority of Americans, whose monthly costs have already risen by between $100 and $749; 74% of those surveyed said they had seen increases of at least $100. More than half of Americans believe the economy is worsening. The CEO of GoFundMe said the economy is so bad that people are crowdfunding to pay for groceries. Nearly 90% of U.S. adults are stressed about grocery prices—with half calling it a major stressor. The CEO of snack and confection giant Mondelez International, who bragged about raising prices to boost earnings in investor calls from 2022-2023, now says consumers have “no inclination to increase their spending”.

The warning signs during the close of the Biden years were clear. In 2024, up to 4 out of 5 consumers believed that “greedflation” was rampant. Consumers were citing food prices as their number one economic concern, 94% were worried about food prices. Share of income spent on food increased to 13% in 2022 and has only grown since the end of pandemic-era benefits. Two thirds of consumers were spending significantly more on groceries. US household purchasing power slipped 7% in the first half of 2023. Over 70 percent of Americans were financially stressed, with 58% living paycheck to paycheck. Food insecurity impacted 27 million Americans in 2023, a number that has now crested 47 million. More than 40 million people fell below the poverty line in 2022 alone. In 2023, very much middle of the road market research firm Dunnhumby pulled no punches reporting that, “our research has also shown that 18-44 year-olds are at the epicenter of a food and financial insecurity crisis that shows no signs of abating.” Bidenomics ended with the economy landing softly on the backs of the working poor.

Now, almost a year into the second Trump Administration, over 6 in 10 Americans are “extremely” or “very” concerned with the price of groceries. Two thirds of Americans disapprove of Republican tariffs and less than 22% think that a crackdown on illegal immigration is a priority. Rising grocery costs are forcing 45% of Virginia families into debt, with the burden weighing even heavier on households with school-age children. 86% of consumers now buy more private-label products, with price cited as the primary decision factor; 42% opt for cheaper alternatives; while 20% skip items altogether. 61% of supermarket shoppers use sale-driven habits—buying on promotion, eating more at home, and choosing store brands over national names, while one-third still prioritized lowest-priced options.

According to Steve Hoffman, a longtime grocery marketer and journalist, “For lower income individuals and families, higher food prices are resulting in less consumption of healthier food options, with the result that Americans are not eating enough fruits, vegetables, and other nutrient-dense foods. Instead, they are choosing sugary and ultra-processed foods, which tend to be cheaper and last longer… inflation continues to shape food choices (and) increase the risk of chronic diseases such as diabetes, heart disease and obesity.”

And relentlessly, prices keep going up.

5-Market Concentration and Pricing Power.

Inflation did not come out of nowhere. Nor was it the result of pandemic benefits giving consumers enough chump change to eat regularly, or government spending “overheating” the economy, or so neoliberal economic dogma would have us believe. Inflation was not inevitable.

Over the last 5 years, market consolidation and the resulting profiteering had been the biggest driver of both price inflation and the resulting decline in food consumption. Market dominance gave leading firms the ability to dictate pricing and supply across the categories or market segments that they dominate. They could then extract enormous profits, especially during times of crisis or instability like the Covid-19 pandemic or Russian invasion of Ukraine.

Professor Isabella Weber explained in 2022, “that supply shocks allowed corporations to tacitly collude, hike prices, and rake in record profits…This is a form of implicit collusion,” she said. “Firms do not even need to talk to one another to know that a cost shock is a great time to raise prices.”

Alex Turnbull, a commodities analyst, echoed this, “When you go from 15 to 10 companies, not much changes. When you go from 10 to 6, a lot changes. But when you go from 6 to 4 – it’s a fix.”

In retail, the top 6 grocery chains control 65% of grocery share nationally, the top 4 over 50%. Walmart. Kroger. Albertsons. Ahold-Delhaize (i.e. Stop&Shop, Food Lion). Walmart alone has over 60% market sharein dozens of metro areas.

In Portland and Seattle, the top 2 chains, Kroger and Albertsons, control 50% of sales. In Chicago, the top 3 chains control 50%, and in Southern California, the top 2 control 40%. In Detroit, Atlanta, Dallas, Arizona and Denver, the top 3 grocers control 60%. In Austin, the top 2 control 75% share. In all cases, Walmart, Kroger and or/Albertsons are in the #1 or #3 spots. 

On grocery shelves, most categories are also dominated by a handful of market leaders, with four or fewer corporations controlling 60-85% of meat processing, 93% of soda sales, 80% of candy, 75% of yogurt, 72% of breakfast cereals, 60% of snack bars, 66% of frozen pizza, 60% of bread, 80% of toothpaste and 80% of toilet paper sales. It is no exaggeration to say that the grocery industry is dominated by food and beverage cartels.

And so, inevitably, prices keep going up.

6-Supply Shocks, Demand Craters.

How did this play out over the last five years? In 2020, the Covid-19 pandemic, the ensuing lockdown, and shutdown of the food service sector led to a brief spike in demand on grocery products. That demand spike tailed off as the economy opened back up, but it did temporarily disrupt replenishment and forecasting models, especially for large scale supply chains that were built on “just in time” logistics that kept inventories low to please finance wonks and institutional shareholders, supply lines that counted on frequent, consistent order patterns. It took a few months to recover from these shocks. But it doesn’t explain what happened next. Consumption trends and price increases after 2021 tell a story of pricing and demand that is far different than what economists would typically use to explain inflation. Covid-19 not only broke supply chains, it broke economic dogma, proving nearly every mainstream, liberal and conservative economist dead wrong about the causes of inflation.

Since 2021:

Beef prices are up 40% and volumes are down 12%. Chicken prices are up 27% and volumes are up just 1.7% Meat prices in total are up nearly 30% and volumes are down 8%. Beef, pork and poultry prices made up the largest chunk of price increase in late 2021 and early 2022, when prices spiked the most quickly. Four conglomerates control up to 85% of these markets and in that same timeframe, their profits surged by 120% and net income by 500%. In 2021, JBS passed 17% higher prices onto consumers, and even though volumes decreased, posted a 345% net income increase.

Tyson Foods doubled its profits from 2021-2022, dryly stating in an earnings call, “Our pricing actions, which partially offset the higher input costs, led to higher sales during the quarter.” The Big 4 meat processors paid out over $4 billion in shareholder dividends in the first 2 years of the Covid-19 pandemic. Meat monopolies perfected their highly extractive business model; underpay workers, underpay ranchers and pass through higher costs to downstream consumers. It worked brilliantly for shareholders.

Soft drink prices are up 46% and volumes are down .59%. The top 3 companies control over 80% of the marketplace, Coke, Pepsi, Dr. Pepper/Snapple, with the top two firms controlling over 50% share in many metro areas. As the CEO of Pepsico bragged in an earnings call in 2023,  “I still think we're capable of taking whatever pricing we need.”

Condiment prices are up 30% and volumes are down 6%. The top 5 firms control over 52% market share in ketchup, mayo, marinades, the literal ketchup cartel. In 2023, the CEO of Kraft Heinz explained, “We’ve already increased the prices that we were expecting [to] this year, but I’m predicting that next year, inflation will continue, and as a consequence [we] will have other rounds of price increases… We have executed a new price increase in the month of August. And the elasticities turned out to be stronger than what is anticipated.” Well, they are no longer.

Chocolate prices are up 40% and volumes are down 9%. The top 3, including Hershey, Mars and Mondelez, have almost 30% market share, and this doesn’t include upstream commodity dealers and processors like Callebault, ADM, Blommers and Cargill whose brand names don’t end up in consumer data. As the CEO of Mondelez explained on an earnings call in 2023,: “Year-to-date, we have delivered nearly $900 million in absolute gross profit dollar growth, a record high for our business, $3.3 billion to shareholders year-to-date through share repurchases and dividends. We also expect a significant contribution from pricing, and we continue to plan for double-digit cost inflation. We've announced a third round of pricing in the U.S… we still expect significant inflation in '23 and hence, the pricing rounds we have to go through.” And they went through, again and again.

Bread prices are up 25% and unit volumes are flat. The top 5 brands have 48% market share, with private label at almost 25%. Two conglomerates, Flower Foods and Bimbo Bakeries, own a myriad of household brands like Wonder, Nature’s Own, Dave’s Killer Bread, Thomas’, Sara Lee and Arnold’s.

Salty snacks, like potato chips and tortilla chips, saw unit volumes flatline and prices up 27%. The top 5 brands have over 33% market share. Pepsico/Frito Lay alone controls more than 50% snack market share in dozens of metro areas through its vertically integrated manufacturing and direct service delivery operations, through contract growing, processing, distributing and stocking its own products on ubiquitously vast swathes of store shelf space managed by delivery drivers.

Egg prices are up 130%, including 45% in one year, and volumes are down 1.37%, due to avian flu, pullet supply constraints from grower market concentration, and the ensuing record profits from market leader United Egg Producers.

Coffee prices are up 28% and volumes are down 9%. The top 5 brands have over 53% market share. It’s not just tariffs driving up prices.

Cookie and cracker prices are up 33%, cookies are down in volume 8% and crackers down 16%. The top 5 cookie and cracker brands control almost 70% of the marketplace, with top 2 at over 50%, a snack duopoly, a biscuit cartel.

Cereal prices are up 27% and volumes are down 12%. The top 3 control over 50%, including General Mills, Posts and Kellogg’s, now owned by confectioner Ferrero. “It’s been surprising how resilient the consumer really is,” stated Kellogg’s Chief Executive Steve Cahillane in 2022. That consumer is no longer so resilient.

Lunchmeat prices are up 23% and volumes are down 12%, the top 5 brands have over 65% share and the top 3 over 50%.

Frozen pizza prices are up 24% and units are down 8%, with the top 5 brands having over 60% share.

Greek yogurt prices are up 41% and, against trend, volumes are up 13%. Yogurt prices overall are up 41% and volumes are up 3.6%, with traditional yogurt volumes down 7%. The top 5 yogurt brands control almost 60% share, and the top 3 brands over 40%, which will now be 2 brands now that General Mills is unloading Yoplait to Lactalis.

And in 2022, the 4 companies who control 70% of French fry production, (Lamb Weston, Simplot, McCain and Cavendish) raised prices within a week of each other. French fry and tater tot prices have increased by 56% since 2019.

And, so, inexorably, prices keep going up.

7-Profit Inflation.

As an example of how this happened, in real time, in July 2021, Pepsico announced its first major price increase of 5%, enabling $8 billion in net income and over $5 billion in shareholder dividends by early 2022. Coca-Cola soon raised prices, leading to a 15% net income increase from 2020-2021. Pepsico then increased prices again and again. In 2023 Pepsico took in $91 billion in revenue, up 35% since 2019, while repurchasing $7.7 billion in stock. The price hikes continued throughout 2022, with Coca-Cola, Hershey’s, Pepsico and Mondelez surpassing earnings forecasts by passing along customer prices that were marked up over the costs increases they were navigating.  Mondelez profits increased by $800 million and issued $4 billion in shareholder payouts. General Mills increased prices 5 times in 2021-2022, and Q4 2022 profits increased 97% to $823 million with $2 billion in shareholder payouts.  The CEOs of Pepsico, Mondelez, Conagra, Kellanova and Kraft-Heinz all bragged to shareholders again and again that they were able to raise prices to boost revenues, surprised by consumer “resilience”.

It wasn’t just the manufacturers. Retailers were also navigating higher supply side costs, and instead of absorbing cost shocks or just passing them through to consumers, there are ample examples to show that leading retailers used the opportunity to raise consumer prices above the rate of producer cost increases. From April 2019 to summer 2022 Walmart raised thousands of prices on a cost-per-ounce basis, including Great Value potato chips by 35%, Pepperidge Farms Cookies by 62% and Great Value Yogurt Cups by 93%. Albertsons is the third largest U.S. grocery chain and at select Albertsons stores in the same timeframe, a basket of like items on a cost-per-ounce basis jumped by over 75%, including private label Signature Vegetable oils up 117%, Signature Potato Chips up 68%, and Lucerne Cheese up 125%. On the stand testifying under oath during their Albertsons merger FTC trial, Kroger executives admitted to raising milk and egg retail prices above the rate of cost inflation. Executives complained this data was cherry picked, but it conflicts with basic category management: skimming incremental margin off of key value items like milk and eggs is not an everyday pricing strategy to keep customers coming back. It is opportunistic and predatory.

As economist Isabella Weber explained in 2022, “Outsize price hikes are at least partially responsible for inflation. Companies have bragged about how they have managed to be ahead of the inflation curve, how they have managed to jack up prices more than their costs and as a result have delivered these record profits.”

And so, in 2021, food company profits growth outpaced wage growth by 671% at Albertsons, 333% at Amazon, 83% at Keurig-Dr.Pepper and 55% at ADM. Stock buybacks as a percent of profit were 38% at Walmart, 52% at Target, 117% at Dollar General and 50% at Kroger. Between 2019 and 2024, Kroger’s net income and operating income grew by over 92 percent and 99 percent, and Albertsons’ net income and operating income grew by over 108 percent and 122 percent. And from 2018 and 2022, Kroger and Albertsons took a combined $15.8 billion in cash out of their businesses and sent it to shareholders in the form of stock dividends and buybacks. 

Likewise, profits outpaced revenues by 17 times at Albertsons, 4.5 times at Kroger and 3.5 times at Target, while CEO pay topped nearly 1000 times the average employee compensation. Stock buybacks as a percent of profit were 38% at Walmart, 52% at Target, 117% at Dollar General and 50% at Kroger. If such profits had been given back to employees, it would have meant annual pay raises for every employee at Dollar General of 112%, Target, 50%, Walmart, 18%, and Kroger, 12%. 

If Walmart, the largest private sector employer, were to give all of its employees a living wage, it would only have taken 2/3rd of the company’s profits posted in the 12 months prior to Q3 2021.

The top 10 retailers increased their combined profits by over $10 billion from 2021-2022 and issued over $15 billion in shareholder buybacks.

CEO pay at these companies averaged over $22 million apiece, nearly 1000 times the average employee annual earnings. Not surprisingly, many of these same food companies pay much of their workforce far less than a living wage. In 2022, 75% of Kroger workers reported being food insecure, 14% experienced homelessness. More than four-fifths of surveyed workers at Albertsons and Kroger were unable to pay basic living costs and more than two-thirds do not have secure housing, while more than nine out of ten workers reported price gouging.

Profits in 2023, at the height of price inflation, at Walmart were $15 billion, for Nestle, $13 billion, for Coca Cola, $10 billion, Pepsi, $9 billion, Unilever, $8 billion, Mondelez, $5 billion and Kroger, $2 billion.

A March 2024 report by the Federal Trade Commission noted that market leading food and beverage retailers saw their revenues outpace their costs by more than 6% in 2021 and 7% in 2023. Typical grocery profit margins are in the 1-3% range.

It wasn’t just food companies. Major oil companies posted $46 billion in earnings in Q2. 2021 profits exceeded over $75 billion at Shell, Chevron, BP and Exxon, enabling $6.6 billion in stock buybacks. Shipping conglomerates are had record profits in 2021 and 80% of global merchandise uses the Big 3 shipping alliances. And the 5 largest railroad freight lines increased operating margins by over a third in the last 6 years as they cut their workforce by 29%. Just 4 companies control 70% of the global grain trade. 2021 was Cargill’s most profitable year ever, with almost $5 billion in net income and up to a 70 basis point increase in margins. The other top grain traders, including Archers-Daniels-Midland, Bunge and Dreyfus also saw record sales growth and profits due to rampant speculation in early 2022. 

Profit margins crested at 15.5% in 2022, the most profitable year since 1950, while corporations issued more than $300 billion in stock buybacks to institutional shareholders. It is no wonder there is an $80 trillion income gap for the bottom 90% of workers since 1975.

The result? Shareholder wealth grew by 57 times as much as worker wages. Worker wages flatlined relative to inflation, as the price of goods outstripped hard won pandemic-era raises and cost of living increases while labor productivity outpaced compensation by over 25%.

The European Central Bank, the OECD and the European Commission all published studies on how profits were driving inflation, it was not a fringe theory in business and finance circles. Going one step further, the International Monetary Fund linked corporate profits to 40% of price inflation, while the Groundwork Collaborative and the Economic Policy Institute documented that over 53% of price increases from 2020-2022 were driven by profit gains, with wage increases responsible for under 8%, debunking yet more economic dogma on inflation.

These profits fed the price increases that consumers are still paying today, and every day, day after day, shopping trip after shopping trip. In other words, stealing from cash strapped consumers by raising prices above the rate of cost hikes, to pay for that vacation home, that yacht, that private jet, that Robin Hood in reverse, that consumers are still paying for with each visit to the grocery store.

This was systemic. Market dominating companies raised prices, generated profits that were redistributed back to shareholders as dividends and buybacks, spurring higher stock prices, and Wall Street rewarding profiteering in what economists called a “price profit spiral”, where shareholders favored conglomerates with large market share because they are able to both raise prices and retain customers:

“Firms increased their markups substantially in 2021, both to their highest level and with the largest single-year increase since 1955. Firm profitability, both before and after taxes, also increased to its highest levels… a phenomenon that could be described as a price-profit spiral. The decision-makers in publicly traded firms are sensitive to shareholder pressure to consistently meet short-term earnings expectations and to distribute large proportions of these earnings in share repurchases and dividends. In an inflationary environment, firms that enjoy the discretion and power to adjust markups are more attractive to financial analysts and asset managers.” 

This isn’t a new phenomenon. In the 18th century, Adam Smith observed, “High profits tend much more to raise the price of work than high wages. Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price. … They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.” 

And it’s no wonder that despite an otherwise milquetoast campaign platform, the Harris ban on price gouging was still popular, with 45% of Americans saying it would strengthen the economy. Over 80% of voters wanted lawmakers to crack down on corporate price gouging.

Those heady days of retailers skimming margin off price increased are now long gone, with Arun Sundaram, an analyst with CFRA Research, noting as far back as 2022 that  “Food retailers are operating in probably one of the best operating environments for them in modern history. We think that the best times are probably behind [for them], and that things are going to get much more challenging down the road, especially as food inflation moderates, food-at-home demand moderates and competition continues to increase.”

And so, prices kept going up. Consumption plummeted. Food insecurity skyrocketed.

8-Inflation Hangover.

And now, many of those processed food and beverage conglomerates are facing the worst post-profiteering hangover in decades. Consumers have not only been buying less of their products, but have shifted to lower priced private labels or smaller, more premium brands with a focus on sustainability, DEI and family ownership, eco-friendliness or special dietary needs. Consumer tides have shifted to demand companies behave more responsibly, even if consumers can’t really afford that and that demand is materially and structurally impossible for most corporations. Yet study after study shows that is what the growing share of younger consumers expect and are not getting from the food giants. They want better products but have less money to buy food and they are taking their money elsewhere. The results?

Mars swallowed Kellanova, Ferrero consumed Kellogg’s, Smuckers snacked on Hostess, Hershey expanded its snack portfolio with Lesser Evil, whose scion, known by his online nickname “Big Balls”, briefly worked for DOGE and was assaulted in downtown Washington DC, precipitating Trump sending in the National Guard to “restore order”. Meanwhile, Cambells feasted on Sovos (Rao’s), Celsius chugged Alani energy drinks, Kraft Heinz disaggregated into more category focused monopolies, General Mills gave up its U.S. yogurt monopoly to the French yogurt monopoly Lactalis, Flower Foods acquired Simple Mills, Pepsico bought Siete Foods and Poppi, and while closing Frito Lay and Pepsi manufacturing facilities due to declining consumption volumes, just three years after gloating about how easy it was to raise prices. General Mills, Amazon and Target laid off thousands, the chickens coming home to roost for years of price over volume profiteering at the expense of consumers and their workforce.

9-Inflation Slayers.

The crisis in the grocery industry starts with market concentration and the price gouging and profiteering it enables, and ends with prices out of reach of consumers, so much that demand has cratered by 5% since 2021. In the crossfire are independent and regional grocers who cannot control supply and pricing, as well as both white collar and rank and file workers, and, of course, cash-strapped consumers.

In order to address market concentration and make food affordable again, these problems require different policy solutions.

Regulators can start by enforcing the Robinson-Patman Act (RPA) a key antitrust law that has been ignored for decades. Robinson Patman enforcement could ensure a more fair and diversified market for workers, suppliers, consumers and the many independent and regional grocers by policing how bigger chains demand better deals, fill rates and payment terms at the expense of competitors. The largest grocers were able to expand due to decades of lax antitrust enforcement where they were able to get away with predatory pricing tactics and restrictive lease covenants that boxed out competitors and unrestrained mergers and acquisitions that hit a brief pause when the FTC managed to stop Kroger from acquiring Albertsons. The current retail grocery market share is the end result of this, and not a natural functioning of competitive markets.

RPA supporters also believe that the preferential pricing received by retail market leaders drives prices up for the rest of the marketplace, a phenomenon called the Waterbed Effect. The idea is that if RPA were enforced, prices would even out, and independents would be able to bring costs and therefore retail prices down, while market leaders (like Walmart) could no longer receive favorable pricing and would likely see costs rise. It is a likely theory, but has not been modeled at the category or retail sector level to see what the granular impact on pricing would be. Whether or not it could be leveraged to the extent that prices would drop below the five year rate of inflation of 35% is not likely. So RPA is primarily useful for addressing market power and pricing power imbalances, with some knock on benefits of enabling more diverse ownership models to survive and flourish and kneecapping the buying power of market leaders. But it is just a starting point. Regardless, thousands of independent and cooperative grocers have seen their costs rise, their market share squeezed, and enforcing antitrust laws could be a start in leveling the playing field.

But it won’t solve for affordability.

A next step could be something like the Emergency Price Stabilization Act, first introduced by former Congressman Jamaal Bowman in 2022. This would have tackled supply side price hikes and recommended the use of price controls to limit price increases in key goods and services. This would dovetail with a price gouging ban such as that proposed by the Harris-Walz campaign in 2024. This ban would have enabled a “crack down on unfair mergers and acquisitions that give big food corporations the power to jack up food and grocery prices”. It did not call for price controls, but just connected the dots between price spikes and concentration, that “extreme consolidation in the food industry has led to higher prices that account for a large part of higher grocery bills”, and was of a piece of some of the awakened antitrust sentiment and activity at the Biden-era , CFPB, FTC and DOJ. Most Americans already live in states that have such emergency price gouging bans in place, like Texas, California and New York. But only state attorneys general have the power to take action, and they have limited reach. A federal ban would have supercharged such enforcement by funding more FTC oversight.

But while a price gouging ban could stop things from getting worse, and antitrust activity could address market share and pricing power, they still does not solve for affordability.

There are only two types of policies that can solve for affordability.

The first is SNAP, or federal food subsidies. SNAP currently accounts for about 9% of grocery industry revenue, or $100 billion a year. But strict means testing has made the program divisive and ineffective at preventing food insecurity. Despite 42 million Americans on SNAP, over 47 million Americans are still going to bed hungry or not getting enough nutritious food. Current SNAP benefits add up to $190 a month for an individual and $351 for a family of four, not enough anywhere in the U.S. for a nutrient dense, healthy, nourishing and enjoyable diet.

The solution, 180 degrees removed from Republican brinksmanship to defund the program, would be to supercharge SNAP. First, make all fresh produce free. Universal free produce. This would be about $90 billion a year in retail price subsidies, based on current fresh produce national sales volumes. Next, subsidize the difference in total retail prices between 2019 and 2025. This would be about $225 billion. All in, this adds up to about $400 billion, or another way to look at it, it is only the difference in defense spending between 2015 and 2025. Meaning that if the U.S. was able to find $400 billion more for “national security” over the last 10 years, it is a fair ask to find the same for food security.

Over 83% of Americans think that food should be a human right. SNAP spending has the added benefit of being an economic engine, its impact multiplying throughout the economy, with each dollar of SNAP generating another $1.50 in economic impact. Plus, SNAP dollars filter through the grocery industry and would be a huge sales boon across the board, generating job growth and justifying wage growth. Combined with a living wage adjustment of the federal minimum wage, such food subsidies could spur demand and reduce food insecurity, as well as taking the pressure off food banks and the food donation complex which has been strained by increased demand on its services.

As researcher Ken Kolb stated in Retail Inequality, “Instead of supply-side solutions that subsidize businesses, we should use those funds to improve the buying power of community members”.

The other major lever could be a national push for a public grocery sector,. Public grocery hit the mainstream with Zohran Mamdani’s successful mayoral campaign in New York City. The good news is, it already exists at scale, in the U.S. military commissary system.

10-Public Groceries At Scale.

The military commissary system uses a cost plus 2% markup, and fully funds the gross margin of retail operations so that retail prices are 20-30% lower than grocery prices. The military commissary generates over $5.6 billion in annual sales and leverages the large scale buying power of over 120 locations to ensure low wholesale costs, stocked shelves and a great selection. This is the only enterprise model that addresses the gross margin to food price inflation gap head on.

The commissary system is well-loved by U.S. servicemembers, who will live near bases to shop there even after they retire. A longtime friend of mine, an army officer and veteran, summed it up, “Always less expensive. Good food. There should be a push for public PX style grocers across the country.”

Suppliers get big, frequent purchase orders and don’t have to deal with the inside income shenanigans of for-profit grocers. A broader public sector could provide a competitive wedge against business models in corporate grocery chains that pad their margins, are loathed by suppliers and do not deliver better prices or quality to customers. It would mean dignified, living wage, unionized jobs that create household wealth and stabilize communities. And just like the military commissary system is recognized as a unique channel of trade (like mass, drug, convenience or natural/specialty), public grocers could carve out their own market niche, as a large scale, ethical buyer that suppliers will want to sell their products into, without the chargebacks, invoice deductions and slotting fees common to for-profit retail and wholesale.

Faye Guenther, President of UFCW 3000, agrees, “Over the last four decades the supermarket industry has become highly concentrated and the power of workers and consumers has been dramatically reduced. We need a public option in the supermarket industry—stores that are focused on providing healthy food in our communities, while providing jobs with good wages and benefits. The public sector already has large, efficient food supply chains through municipal education departments and through the U.S. military commissary system, so we don’t need to reinvent the wheel. Publicly owned supermarkets should find the right way to piggy back on those systems.”

Public groceries could also be crucial to enforcement of RPA. In the short term, antitrust rulings could be disruptive to grocery markets, if violators were forced to shut down, sell off divisions to local or regional competitors, or otherwise revamp business models to be in compliance. RPA enforcement would need a backstop if there were sudden market disruptions that threatened community food supplies where dominant firms control large portions of the marketplace, such as Walmart does in much of Oklahoma or Arkansas.

And what such public grocers sell is up for discussion, but over a dozen cities already have well-established values based purchasing programs, at scale, for public institutions that prioritize fair wages, human rights, animal welfare, environmental sustainability and community benefits. Values based purchasing is based on road tested private sector supply chain practices found in thousands of for-profit grocery stores, from Whole Foods to Kroger to Thrive Market, but improved upon and folded into public institutions that offer ethical, high quality products free or low cost at point of consumption.

Public grocers could also leverage existing advantages of scale, such as in New York City where public institutions already purchase over $500 million in food a year. Public grocers do not need to be utilities or monopolies. Instead, building and offering a public option for grocery could be the backstop that the food system needs, that provides great food for communities, that suppliers and farmers love as an alternative customer to extractive retailers and wholesalers, and that is a great place to work.

There is ample history and validation for public groceries from all over. Azalea Fresh Market is the Atlanta’s first government-run grocery store, offering fresh and locally made foods rather than packaged or convenience items. It is the result of a collaborative effort between the City of Atlanta, Invest Atlanta, Savi Provisions, the Independent Grocers Alliance and community members. Madison, Wisconsin and rural Venice, Illinois, also plan to open municipally-owned stores and Boston, Portland, and other cities are exploring.

As Nevin Cohen and Raj Patel have documented, such public efforts can be viable and effective. Depression-era New York City Mayor Fiorello LaGuardia built a network of city-run indoor markets and six of these LaGuardia markets still operate today. The Food Retail Expansion to Support Health (FRESH) program subsidizes new and enlarged supermarkets in underserved neighborhoods. FRESH supermarkets must reserve 30% of their space for perishable foods, with at least 500 square feet for produce. New York City has one of the largest farmers’ market networks in the U.S., with more than 120 markets across the city during the growing season. The City provides land and operational support and enables markets to accept federal SNAP benefits, funds more than 700 food pantries and soup kitchens citywide and helps low-income New Yorkers with chronic diseases purchase healthy groceries online.

India’s Public Distribution System (PDS) distributes subsidized food and non-food items to India's poor. Istanbul’s small scale, municipal neighborhood markets sell food at or below cost. The non-profit stores are only available to households whose low-income status had been verified by the city. Prices are low, and families receive pre-loaded monthly loyalty cards. Bulgaria’s government has announced plans to create a network of 1,500 stores across the country, with the goal of providing affordable groceries at a low markup, and supporting small-scale rural food production. In South Korea, public investment in “precautionary” supply chains ensures that public institutions have access to healthy, safe and sustainably grown products.Mexico has 25,000 basic goods outlets, with plans for 30,000 tiendas bienestar, well-being stores, by 2030. In Mexico City, programs like Leche Liconsa provide subsidized milk and other food staples to low-income households. 

Brazil has pulled out all the stops to address poverty and hunger, and built a model that looks applicable to the U.S: expansion of cash transfers to the most vulnerable families; a universal school feeding program, expanded to other public institutions; an increase in minimum wage; public procurement from family farmers; targeted support for Black and Indigenous communities to have access to public food purchases; granting every Brazilian the human right to adequate food in national law; a robust Feeding Cities program; and unprecedented cross-government coordination.

But public sector retail is just the start. A more ambitious vision could also include public sector investment further back in the supply chain, in food hubs, distribution and wholesaling, in processing and manufacturing, in storage and logistics, and in farming and food production. Such a model could operationalize the right to food, steer supply chains in the service of sustainability, good jobs, and the common good, and take the race to the bottom profit motive out of large scale food provisioning.

Alternative business models that would benefit from antitrust enforcement also deserve further public investments and subsidies, such as worker cooperatives or consumer owned cooperatives. They are better tuned into local farmers, products and consumer needs, disrupt market concentration, and empower workers and community members to be active participants in the food system. But they still require full margins to operate, and tend to be higher priced because, unlike discounters and mass merchants, many try to pay fair wages. And the public market stalls in New York City are only partially subsidizing their gross margin through lower rents and taxes. These public markets still must take a markup over wholesale to pay for labor and other overhead, and they don’t necessarily have the lowest possible wholesale costs, and don’t solve for affordability.

11-Inevitable.

Since 2019, grocery prices have risen higher than the gross margins needed to sustain most retail operations. And no matter the best intentions of local, independent and cooperative grocers to serve their communities, it is mostly outside of their ability to make food affordable again, simply because the increase in price since 2019 is equal to or greater than their gross margin they need to operate. This is even more extreme for low margin discounters and mass merchants. They can’t cover the spread.

The only solutions to the affordability crisis are to expand federal food subsidies for consumers and fully subsidize the rise in prices, and to create and expand a large scale public enterprise model that assures low wholesale costs and takes the gross margin out of the consumer price equation.

That is how we are going to make good food affordable again. Inflation has made public groceries inevitable.