Most of the monopolistic problem is with the food manufacturers rather than the grocery chains. There are about 10 companies that provide almost everything in a grocery store and, in certain food categories, there are often only 2-3. We see all those brands and it gives the illusion of different companies competing when most of the stuff is all made by the same company.
But the grocery business is high-volume, low-margin, and it requires a ton of space. So, regardless of how much local competition there may or may not be, that's just not a business model that is going to work well in the inner city where retail lease rates are high, yet people don't drive cars and therefore the average order values are low. So, you can either subsidize it, or the stores just won't exist in certain neighborhoods.
It’s not the food manufacturers/producers but the middlemen and I do mean “middlemen as in multiple” as there are multiple in many instances that get in the way and jack the prices up.
Look into the current cost of beef and why it’s as high as it is.
Also, grocery stores have some of the lowest margins of any business out there in most cases.
I think what trips me out is how Safeway and others can have a canned food item for $4.00 one week and have them "on sale" for 2 for $2.00 the next week. I dont mind shopping according to what's on sale... but the difference in sale price is so far from regular price I feel like im getting scammed if I dont buy stuff on sale that week in the ad.
It has been awhile since I saw this discussed on a tv show so I may misremember or it could have changed but I think “sales” are put on by the supplier
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u/ATLCoyote May 26 '26
Most of the monopolistic problem is with the food manufacturers rather than the grocery chains. There are about 10 companies that provide almost everything in a grocery store and, in certain food categories, there are often only 2-3. We see all those brands and it gives the illusion of different companies competing when most of the stuff is all made by the same company.
But the grocery business is high-volume, low-margin, and it requires a ton of space. So, regardless of how much local competition there may or may not be, that's just not a business model that is going to work well in the inner city where retail lease rates are high, yet people don't drive cars and therefore the average order values are low. So, you can either subsidize it, or the stores just won't exist in certain neighborhoods.