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Per the article, American supermarkets have the same profits (~2%) as cheaper European ones, but much higher fixed costs. Some of these costs are the cost of in
by yojo 4y ago
Per the article, American supermarkets have the same profits (~2%) as cheaper European ones, but much higher fixed costs. Some of these costs are the cost of inputs, but that only explains so much; wholesale food prices are much lower than what you pay at the grocery store.
Political wing-nuttery aside, I don't see who you think is the culpable party here.
Trade is a boogeyman - most countries import way more of their food than America does. The UK import 46% of its food, the US imports 15%.
It's probably not farmers, since most of them seem to be going bankrupt. There is a guy that's made $4 billion on pistachios and almonds, but that's not exactly your food staples.
I don't think it's the truckers, I haven't heard of anyone making a killing driving produce around.
The article has some good theories as to why it might in fact be the grocery store's fault. America's stores are larger, stock more goods, have higher-touch service, and sell fewer store brand products. This gives them a higher cost structure, resulting in high food prices without high profits. There are grocery stores in America with lower prices, places like Trader Joe's, which sell a smaller selection of store-brand goods in smaller stores at lower prices.
- billjings 4y agoPer the article, companies like Tyson upstream in the supply chain are taking record profits. So high wholesale prices due to concentration of suppliers is indeed a major part of the equation.