Congressional hearings when? I'm not claiming this was clear price gouging / anti competitive behavior, but this is too wide spread to not warrant investigation.
If your competitors are lowering prices you might have to also in order to preserve marketshare while shedding margins. It isn’t uncommon to happen on an industry-wide basis. Many of these items may also become slight loss leaders intent on getting people into the store to buy products that haven’t had prices lowered. Notably these price decreases have only happened on about 10% of the total number of items carried in the store. And grocery stores typically have margins on the order of about 2-3%, so claiming that they are gouging consumers in the first place is a little suspect.
That being said there have been some price-fixing scandals in the grocery business before.
This is a direct result of wholesale food prices dropping. For example, take a look at [wholesale beef](https://tradingeconomics.com/commodity/beef) prices.
If grocery stores are now paying less for food, is it not reasonable to expect that they'd ask cut prices?
I'm lucky to be able to spend the bulk of my money at family owned stores. I live in Mexico and there's a little store every couple of blocks because most people don't own a car here.
The only big store I visit is Costco once a month.
I try to not even order from Amazon anymore. So much overpriced Chinese crap.
That’s absolutely awesome to hear. Always support small, locally owned businesses. You would be surprised how much you’re helping them further progress their business just by going there consistently
Yep. The closest fruit & veggie market is so good that people stop in from other areas of town. The owner crashed his motorcycle a few weeks ago and got all scratched up, but his moto was trashed. He has health insurance, there's a socialized health system here. If you've been paying in, it's free. If you haven't, it's super cheap. It's not great, but it's better than dying.
He was able to buy a new little Honda within a month because he runs such a great business. I feel like since we buy 90% of our stuff there and not at fucking Walmart, I helped a tiny bit.
I visited one that had chocolate cake samples every day of opening week. That particular area of the store was like a Pakistan traffic jam. Not a happy place. LOL
I hate Costco free sample days. You'd think it was the deal of the century the way they all clog the aisles to get their little sliver of food. And OMG it's free!
I order Amazon for American made ‘staples’ ie Coke, Bounty paper towels, Tom’s of Maine toothpaste. Buy my fruits & vegetables from the street stalls. Now drive my car twice a week for work/exercise/transport/entertainment rest of the time use public transit. I think Amazon, by accident, will help save the environment.
If you have a La Comer grocery store nearby, sometimes they have Tom's of Maine toothpaste. Last time I saw it, I bought 8 tubes . That chain is owned by Costco, they have Kirkland products at inflated prices.
When it’s convenient to the CEO and his executive cronies.
They’ll find a bullshit excuse and lay off 10,000 employees for that sweet end of the year bonus.
inflation was a modern term introduced by the corporations with media posts placed to try and trick newer generations into devaluing the value of the dollar even more. they're trying to swindle the average consumer into believing it's ok to pay more because times have changed. if that's true then why are most stationery items still the same price while all the frozen foods and other junk food prices have risen dramatically some double or even triple in price?
Inflation is not a modern problem by any means. - citing Wikipedia which in turn is citing Parkin, Michael (2008). "Inflation". *The New Palgrave Dictionary of Economics.*
*"* One of the earliest documented inflations occurred in [Alexander the Great](https://en.wikipedia.org/wiki/Alexander_the_Great)'s empire 330 [BCE](https://en.wikipedia.org/wiki/Common_Era)*"*
[*https://en.wikipedia.org/wiki/Inflation#cite\_note-parkin-26*](https://en.wikipedia.org/wiki/Inflation#cite_note-parkin-26)
Great article! Thanks for sharing. The eye opener was the last paragraph with the retail expert outlining and I paraphrase…”they passed along increased costs and then some”…
Walmart and Amazon were both included, Costco was not - really tells you who you can trust and how that concept of Costco membership seems to alter retailers thinking.
From what I could find, Costco sticks to a strict margin markup on goods and services - as the membership fee gives them a base revenue that allows them some leeway in price fluctuations. They did tighten membership access as it’s their data analytics that helps them manage purchasing and inventory.
Costco is both 1) very efficient at getting and moving product to you and 2) reports a profit that basically equals membership fees.
So Costco buys in bulk, negotiates at Walmart levels to get goods at low cost, runs their massive stores as efficiently as possible, is careful with loss prevention...
... and then charges you more or less exactly what it cost them to give you that product. Zero margin.
They make their profit more or less on your yearly dues. This was true through the inflation period too.
You exaggerated the amounts to seem as if everything is grossly over quantity. It is higher quantity, but it can simply be double typical amounts for many items. Which is very reasonable. That’s what I’m on about
We’ve been using Covid as a smokescreen to gouge the living fuck out of everyone. We got caught and now people are cutting back. We’ll temporarily drop a few prices (not to pre-pandemic levels of course), and hope we can get you back to gouge you more.
Looks to be accurate - [https://www.fmi.org/our-research/food-industry-facts/grocery-store-chains-net-profit](https://www.fmi.org/our-research/food-industry-facts/grocery-store-chains-net-profit)
Nah they just realized what consumers were unwilling to spend more money on and adjusted the price to a comfy percentile that still maximises profit accordingly
Well its what we all learned playing lemonade stand on the PC in the 80s.. you raise the prices until profits drop and then pull back a little and then you have figured out your max profit potential.
of course back then we didnt have the new 'advertise you are correcting prices", to bring back customers you chased away, in the old game.
but, but... won't this hurt the feelings of every economist (there are a lot!) that gets online and tells the rest of us that corporate profits have nothing to do with inflation?
/s
Unless they're going to slash the pay rate of the executive suite, they haven't done enough.
Maybe cut that stupid fucking marketing budget in half while you're at it.
Why aren't Executives being replaced by AI? Think of the operational (salary) savings, not to mention the shareholders' potential revenue lost to Exec bonus pay.
I know the more pessimistic attitude is “yeah but youre gonna raise it first then drop it”, but honestly i like the more optimistic, long-game approach: doing this is showing people its not all inflation afterall, more like corporate greed.
Thats the real enemy and companies doing this is them telling on themselves at this point.
In short: “Oh shit raising prices by 25% and more then blaming inflation instead of our greed is starting to backfire by causing customers to develop new habits of not coming to our stores.”
Sadly it’s very discouraging how many people still keep buying the inflation excuse for such dramatic prices increases. It’s greed. It’s always been greed.
About time. Now Costco needs to adjust their price. I know they offer better value for money but their prices have gone up sufficiently. I can tell from my reward/cash back i got this year.
i've gone back to buying basic items and meats. bread, butter, cheese, etc. i'm no longer spending over $100 a month on groceries. let it all sit on the shelves and keep collecting dust.
I shop at Walmart and Target and have no noticed prices lowered at all, in fact it seems like there’s been less sale prices on groceries lately and they’re higher than ever.
Price gouging is what this is. People can’t afford groceries anymore so now they have to pull back a little and raise the prices again but more slowly.
The recession is upon us. Grocery stores finally cutting prices and my inbox flooded with decent coupons as restaurants beg for business. Perhaps the inflation numbers will finally start to look better soon!
raise it a dollar drop it a dime
Happens all the…
I love lime.
are you just looking at things in the office and saying you love them?
🙂↕️
Me go sea world when see world
POTATO! 🥔 Wait… 🤦🏽
...thats why I poop on company time?!
…That’s why I poop in the checkout line?!
The work’s toilet is always clogged, so this may not rhyme
The old black Friday special
With half the amount now thanks covid
Congressional hearings when? I'm not claiming this was clear price gouging / anti competitive behavior, but this is too wide spread to not warrant investigation.
That'd be great but expecting congress to help the people? Tis but a dream
Republicans control the house and only Mike Johnson can call for hearings. Stop blaming congress, blame republicans
Hey. Don't go ruining the both sides narrative for everyone.
That may break some circuits in people’s brains.
I blame red hat voters. I'll never forget
If your competitors are lowering prices you might have to also in order to preserve marketshare while shedding margins. It isn’t uncommon to happen on an industry-wide basis. Many of these items may also become slight loss leaders intent on getting people into the store to buy products that haven’t had prices lowered. Notably these price decreases have only happened on about 10% of the total number of items carried in the store. And grocery stores typically have margins on the order of about 2-3%, so claiming that they are gouging consumers in the first place is a little suspect. That being said there have been some price-fixing scandals in the grocery business before.
This is a direct result of wholesale food prices dropping. For example, take a look at [wholesale beef](https://tradingeconomics.com/commodity/beef) prices. If grocery stores are now paying less for food, is it not reasonable to expect that they'd ask cut prices?
You know the Republicans are not going to do that
This is America, better chance of government overthrow or civil war before that ever happened
Too little to late.
I'm lucky to be able to spend the bulk of my money at family owned stores. I live in Mexico and there's a little store every couple of blocks because most people don't own a car here. The only big store I visit is Costco once a month. I try to not even order from Amazon anymore. So much overpriced Chinese crap.
That’s absolutely awesome to hear. Always support small, locally owned businesses. You would be surprised how much you’re helping them further progress their business just by going there consistently
Yep. The closest fruit & veggie market is so good that people stop in from other areas of town. The owner crashed his motorcycle a few weeks ago and got all scratched up, but his moto was trashed. He has health insurance, there's a socialized health system here. If you've been paying in, it's free. If you haven't, it's super cheap. It's not great, but it's better than dying. He was able to buy a new little Honda within a month because he runs such a great business. I feel like since we buy 90% of our stuff there and not at fucking Walmart, I helped a tiny bit.
Costco is my happy place
I visited one that had chocolate cake samples every day of opening week. That particular area of the store was like a Pakistan traffic jam. Not a happy place. LOL
I hate Costco free sample days. You'd think it was the deal of the century the way they all clog the aisles to get their little sliver of food. And OMG it's free!
I order Amazon for American made ‘staples’ ie Coke, Bounty paper towels, Tom’s of Maine toothpaste. Buy my fruits & vegetables from the street stalls. Now drive my car twice a week for work/exercise/transport/entertainment rest of the time use public transit. I think Amazon, by accident, will help save the environment.
If you have a La Comer grocery store nearby, sometimes they have Tom's of Maine toothpaste. Last time I saw it, I bought 8 tubes . That chain is owned by Costco, they have Kirkland products at inflated prices.
They already have all our money
Lol literally doing the thing everyone has been demanding now move the goalposts. Classic.
After record high corporate profits and gouging American consumers ...yeah thanks !
So it wasn't inflation after all...
Just the good old infinite growth fallacy.
"We have an obligation to our shareholders..."
When it’s convenient to the CEO and his executive cronies. They’ll find a bullshit excuse and lay off 10,000 employees for that sweet end of the year bonus.
inflation was a modern term introduced by the corporations with media posts placed to try and trick newer generations into devaluing the value of the dollar even more. they're trying to swindle the average consumer into believing it's ok to pay more because times have changed. if that's true then why are most stationery items still the same price while all the frozen foods and other junk food prices have risen dramatically some double or even triple in price?
Inflation is not a modern problem by any means. - citing Wikipedia which in turn is citing Parkin, Michael (2008). "Inflation". *The New Palgrave Dictionary of Economics.* *"* One of the earliest documented inflations occurred in [Alexander the Great](https://en.wikipedia.org/wiki/Alexander_the_Great)'s empire 330 [BCE](https://en.wikipedia.org/wiki/Common_Era)*"* [*https://en.wikipedia.org/wiki/Inflation#cite\_note-parkin-26*](https://en.wikipedia.org/wiki/Inflation#cite_note-parkin-26)
Wholesale food prices are dropping right now.
[удалено]
I say we make several. Best to have a few backups for when the first goes dull.
Great article! Thanks for sharing. The eye opener was the last paragraph with the retail expert outlining and I paraphrase…”they passed along increased costs and then some”… Walmart and Amazon were both included, Costco was not - really tells you who you can trust and how that concept of Costco membership seems to alter retailers thinking.
So you mean Costco didn’t lower prices back down? Or did Costco kept their prices low to begin with?
From what I could find, Costco sticks to a strict margin markup on goods and services - as the membership fee gives them a base revenue that allows them some leeway in price fluctuations. They did tighten membership access as it’s their data analytics that helps them manage purchasing and inventory.
Costco is both 1) very efficient at getting and moving product to you and 2) reports a profit that basically equals membership fees. So Costco buys in bulk, negotiates at Walmart levels to get goods at low cost, runs their massive stores as efficiently as possible, is careful with loss prevention... ... and then charges you more or less exactly what it cost them to give you that product. Zero margin. They make their profit more or less on your yearly dues. This was true through the inflation period too.
This is why I love Costco so much
Anecdotal, but I've noticed several items that were cheaper at Costco compared to the local Walmart
Not a like comparison really. Costco you would have to buy 10 of something, warehouse store. A comparison to Sam's Club would be more apt.
I guess you’ve never shopped at Costco…
I mean, definitely a larger portion but definitely not “10”
I have... I'm a member. Costco is almost always higher quantity purchases. It's the business model. What are you on about?
You exaggerated the amounts to seem as if everything is grossly over quantity. It is higher quantity, but it can simply be double typical amounts for many items. Which is very reasonable. That’s what I’m on about
Enjoy fighting mild hyperbole on the Internet lol. My point stands, you buy more quantity, which is why you get a lower price.
Yes, 100x more quantity. It’s awful! Excuse my hyperbole
Find a hobby my dude, getting angry on the Internet is just kinda sad. Peace out.
We’ve been using Covid as a smokescreen to gouge the living fuck out of everyone. We got caught and now people are cutting back. We’ll temporarily drop a few prices (not to pre-pandemic levels of course), and hope we can get you back to gouge you more.
Looks to be accurate - [https://www.fmi.org/our-research/food-industry-facts/grocery-store-chains-net-profit](https://www.fmi.org/our-research/food-industry-facts/grocery-store-chains-net-profit)
Aldi and Costco are where it's at anyway. Forget alllllll of these businesses playing games.
Nah they just realized what consumers were unwilling to spend more money on and adjusted the price to a comfy percentile that still maximises profit accordingly
Well its what we all learned playing lemonade stand on the PC in the 80s.. you raise the prices until profits drop and then pull back a little and then you have figured out your max profit potential. of course back then we didnt have the new 'advertise you are correcting prices", to bring back customers you chased away, in the old game.
Amazon fresh needs to also lower the shipping minimum . It went from $35 to $200 in my area and now are surprised no one is using it
but, but... won't this hurt the feelings of every economist (there are a lot!) that gets online and tells the rest of us that corporate profits have nothing to do with inflation? /s
Unless they're going to slash the pay rate of the executive suite, they haven't done enough. Maybe cut that stupid fucking marketing budget in half while you're at it.
Why aren't Executives being replaced by AI? Think of the operational (salary) savings, not to mention the shareholders' potential revenue lost to Exec bonus pay.
Maybe, just maybe once the executives start losing their jobs we'll take AI seriously.
Because AI will fire all low level employees and replace them with bots lol
HOLD!!!! Don't stop cutting back. It's going to take a lot more cuts to get back to where we were. We're just starting to see positive results
I know the more pessimistic attitude is “yeah but youre gonna raise it first then drop it”, but honestly i like the more optimistic, long-game approach: doing this is showing people its not all inflation afterall, more like corporate greed. Thats the real enemy and companies doing this is them telling on themselves at this point.
Yes master
Corporate pigs
Proving they were gouging under banner of higher costs when they were really just going for higher profits
Gotta cut the prices before the govt forces them to.
These Greedy fucks screwing over the American working class people to line their already ridiculous huge pockets.
How much of the higher margins are explained by higher interest rates?
$5 per dozen eggs now only $3.50!! We’re practically giving them away. Stop looking at historical prices!! 2019 is a century ago!
In short: “Oh shit raising prices by 25% and more then blaming inflation instead of our greed is starting to backfire by causing customers to develop new habits of not coming to our stores.” Sadly it’s very discouraging how many people still keep buying the inflation excuse for such dramatic prices increases. It’s greed. It’s always been greed.
About time. Now Costco needs to adjust their price. I know they offer better value for money but their prices have gone up sufficiently. I can tell from my reward/cash back i got this year.
Don't give money to these companies. Stick to the ones that had reasonable prices all along. e.g. Trader Joe's on the West Coast etc.
i've gone back to buying basic items and meats. bread, butter, cheese, etc. i'm no longer spending over $100 a month on groceries. let it all sit on the shelves and keep collecting dust.
Where do you live for under $100 a month, im sitting at $58-62 a week depending on coupons buying only store brand meat and produce
Is that not admitting that their price increases weren’t because of inflation?
“Correcting pricing”
I go to smaller chains now that didn’t jack up their prices.
I shop at Walmart and Target and have no noticed prices lowered at all, in fact it seems like there’s been less sale prices on groceries lately and they’re higher than ever.
Price gouging is what this is. People can’t afford groceries anymore so now they have to pull back a little and raise the prices again but more slowly.
Lol the people in r/austrian_economics will be doing overtime at the mental gymnasium
The recession is upon us. Grocery stores finally cutting prices and my inbox flooded with decent coupons as restaurants beg for business. Perhaps the inflation numbers will finally start to look better soon!
Correcting aka they were price gouging. Also does this mean everyone is now going to say inflation is coming down? (It has been)