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pass down wholesale price increases, etc. I think it is very important to note that when it comes to grocery price increases, even if suppliers are raising the

by dfxm12 4y ago

pass down wholesale price increases, etc. I think it is very important to note that when it comes to grocery price increases, even if suppliers are raising their prices (and this isn't always the case), groceries stores aren't just passing down wholesale price increases, they're raising prices even further. For grocery stores, this isn't an issue with (unqualified) "inflation", it's an issue of price gouging. https://www.dailymail.co.uk/news/article-11668863/Supermarkets-not-suppliers-unfair-food-price-hikes-shelves-insiders-claim.html https://www.dailymail.co.uk/news/article-11668863/Supermarke...

mhb 4y ago
If only there was some mechanism to mediate that. Maybe competition.
0xffff2 4y ago
If you want to credibly make that claim, you're going to need a much better source than the Daily Mail.
junofan 4y ago
These are like 1–2% margin businesses. How much gouging could they be doing?
dannyobrien 4y ago
What you'll note from this article (from the Daily Mail, but the quotes seem legit) is the source of the price rises is contested. The grocery store management said -- somewhat vaguely, after being questioned about it -- that, yes, suppliers could be raising prices excessively. Then an "insider" said that actually it was the groceries that were doing it. The whole point with inflation is that nobody knows what future price-levels are going to be, so there's upward price instability. Everyone is trying to gauge how much to raise things -- and of course, they tend to overshoot, which leads to a higher rate of inflation. That's what makes inflation so pernicious, and hard to eradicate. It's not so much that a constant rate of inflation is damaging, but when increase become noticeable, people begin trying to anticipate it, and that increases the rate of change. You'll also see this in pay negotiations: you'll see more strikes over pay raises, but it'll be very hard for unions or companies to accurate gauge what the pay rate rise should be. It's not that unions are trying to "gouge" management -- it's that the consequences of demanding too small a pay rise is the same as accepting a pay cut. So labour demands more than inflation, which in turn tends to push up the inflation rate.
graeme 4y ago
Everyone cites "price gouging" every time prices go up in any industry, but if you bother to look it up the average profit margin of a UK grocer in 2022 is about 3%. Unless that has jumped to 10-15%, or jumped in any meaningful way, you're just seeing inflation, not gouging. Generally, grocers are among those businesses with the least pricing power. https://www.reuters.com/markets/europe/savings-algorithms-uk-supermarkets-battle-cost-living-crisis-2022-06-30/ https://www.reuters.com/markets/europe/savings-algorithms-uk...
circlefavshape 4y ago
The Daily Mail? Seriously?

by dfxm12 4y ago

mhb 4y ago

If only there was some mechanism to mediate that. Maybe competition.

0xffff2 4y ago

If you want to credibly make that claim, you're going to need a much better source than the Daily Mail.

junofan 4y ago

These are like 1–2% margin businesses. How much gouging could they be doing?

dannyobrien 4y ago

What you'll note from this article (from the Daily Mail, but the quotes seem legit) is the source of the price rises is contested. The grocery store management said -- somewhat vaguely, after being questioned about it -- that, yes, suppliers could be raising prices excessively. Then an "insider" said that actually it was the groceries that were doing it. The whole point with inflation is that nobody knows what future price-levels are going to be, so there's upward price instability. Everyone is trying to gauge how much to raise things -- and of course, they tend to overshoot, which leads to a higher rate of inflation. That's what makes inflation so pernicious, and hard to eradicate. It's not so much that a constant rate of inflation is damaging, but when increase become noticeable, people begin trying to anticipate it, and that increases the rate of change. You'll also see this in pay negotiations: you'll see more strikes over pay raises, but it'll be very hard for unions or companies to accurate gauge what the pay rate rise should be. It's not that unions are trying to "gouge" management -- it's that the consequences of demanding too small a pay rise is the same as accepting a pay cut. So labour demands more than inflation, which in turn tends to push up the inflation rate.

graeme 4y ago

Everyone cites "price gouging" every time prices go up in any industry, but if you bother to look it up the average profit margin of a UK grocer in 2022 is about 3%. Unless that has jumped to 10-15%, or jumped in any meaningful way, you're just seeing inflation, not gouging. Generally, grocers are among those businesses with the least pricing power. https://www.reuters.com/markets/europe/savings-algorithms-uk-supermarkets-battle-cost-living-crisis-2022-06-30/ https://www.reuters.com/markets/europe/savings-algorithms-uk...

circlefavshape 4y ago

The Daily Mail? Seriously?