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I admit I don't know much about the grocery business. But you make it sound like those phone conferences were recorded surreptitiously, when in reality they wer
by hcurtiss 4y ago
I admit I don't know much about the grocery business. But you make it sound like those phone conferences were recorded surreptitiously, when in reality they were just their public earnings calls. And, by my read, they were saying that the consumer was willing to pay more and, in an effort to preserve their margin given increased supplier pricing, they were increasing store pricing. None of that strikes me as surprising. How else are they to set their pricing, other than to charge what people are willing to pay? At some point, large margins will cause more participants to enter the market, driving down pricing. Without that price signal, supply would never increase, leading either to increased prices or shortages. This is all Econ 101. I agree that a monopoly position can compromise market dynamics, and maybe that's the case with grocers, but I don't see that in the articles you link.
- daveguy 4y agoNowhere in the post you replied to is an implication that the record was recorded surreptitiously. It explicitly says, "on record."
- aerotwelve 4y agoIf they were only increasing prices to a degree that covered their (temporary) higher costs, they wouldn't be making record profits. Since they generally brag on these calls about their record-breaking profits, and say that their record-breaking profits are linked to the fact that they raised prices, we can safely deduce that they're increasing prices more than they had to.
- ToValueFunfetti 4y agoNo clue about the general topic, but if you hold margins constant during inflation, you should expect record-breaking nominal profits by default.