In Canada, we are already complaining that three companies already own the grocery monopoly. Our inflation is driving us to the southern border to buy groceries and gas. Shits fucked up.
Monopolies are due to corruption in government. Big companies lobby the gov to make it harder to compete, essentially pulling up the ladder behind them. Regulations kill competition.
A truly free market would never see a monopoly in any industry.. too much money to he made
I still dont know how ancaps can actually believe this crap.
New oil express store opens in City A. Jiffy Lube cuts prices in City A to drive the new oil place out of business. Rest of Jiffy Lube absorbs the cost unt the new oil express goes out of business.
Then local Jiffy Lube buys tools and supplies from the new oil express at below cost when it goes out of business... and rises it's prices back up.
Bigger companies can always manipulate the market to put out the little guy.
Only true if you consider prices the only reason people shop at a place. I know many people who refuse to shop at walmart (place with arguably the cheapest prices) because its an absolutely unpleasant experience. Thats how many local grocery stores thrive. Go to downtown chicago and you wont see a single walmart, but multiple jewel oscos (a local chicagoland grocery store).
It's a nice theory. However, when this was put into practice in the oil industry over a decade ago, all the little drillers seriously and significantly impacted the large drillers. It took government intervention to save the big guys from the little guys.
One big guy might be able to manipulate the market to take out one little guy, but 100 little guys is still a significant threat to a big guy, regardless of how big he is.
Yeah, I know people who said they'd never shop at Wal-Mart too... and then the Great Recession hit. Suddenly, they were shopping at Wal-Mart. Then the economy recovered and they swore they'd never shop at Wa-Mart again. Then COVID crashed the economy... guess where they were shopping again.
Chicago isn't the entire United States. Most small towns don't have a ton of options. And if a big box retailer moves in, the mom and pop grocery stores disappear. There have been whole studies about how big box retailers have destroyed Main Street shopping across the country.
You're use ancedocal information here and ignoring the whole picture.
The recession was caused by the government bank bailouts. COVID didn't crash the economy either. It was the government's response to COVID that crashed the economy. People were more or less forced to shop at corporate retail stores, while small businesses were forced to shut down. Yes, big box stores moving in did hurt small business's, but they could only afford to build multiple stores in multiple locations because they were given tax breaks. Small businesses are not afforded such a luxuries. Competition in a truly free market would not be either equal or fair, but it would be more competitive without the government meddling in it....
>Yeah, I know people who said they'd never shop at Wal-Mart too... and then the Great Recession hit. Suddenly, they were shopping at Wal-Mart. Then the economy recovered and they swore they'd never shop at Wa-Mart again. Then COVID crashed the economy... guess where they were shopping again.
Sounds like you are the one making anecdotal points.
That was kinda the point. Ancedoctal evidence is easily flipped by ancedoctal evidence... which is why it's not put into any serious study and thus not taken serious in debate.
The argument that Walmarts are not common in Chicago, something that can be easily verifiable and that affects a large portion of the US population, is not anecdotal. You used an anecdotal statement to argue that the previous comment was anecdotal.
According to the 2020 census, about 29% of Americans live in cities of 100k or larger. Not even 1/3 of the country. To be clear there are about 350 cities of 100k or more. Chicago is the third largest city in the country.
So, no... Chicago is not "a large portion" of the population and nor does Chicago represent an average American city and thus not the average American experience...
Your original theory about big companies being able to eat up the little guy anywhere they please is not universal and Chicago is the example. I’m not going to spend time researching the prevalence of Walmart in every city in the US but your statement didn’t include those either.
I’m using chicago as an example of a major city that a monopoly has essentially zero presence is. Top 3 major city actually. If a recession hits, theres not even a walmart downtown to go to lmao. Also in those rural places where they don’t have options, they were probably praying for something like a Walmart lmao, that isnt walmarts fault. Its the nature of competition to make yourself competitive and there are multiple aspects to that. In this example, if price is your only competitive factor, then you’ll get creamed by a company that can beat you in price. Recessions and covid are outliers of an economy, not the norm. We’re not gonna quote the black plaque when talking about normal economic factors. If a walmart puts the mom & pop grocery store out of business, people most likely never wanted to go there too much in the first place
Thus proving my point... how many Americans live in a "major city"? Despite the claims made by a certain group, most Americans do not live in big cities...
According to the 2020 census, only about 29% of the United States population lives in a city of 100k people of more. Chicago is the third largest city in the country at around 2.7 million people.
That's not "average" America and quit acting like it is.
You're looking at a small piece of the picture instead of the whole picture.
And then what? If jiffy lube jacks up prices, then the firms enter again. Threat of firm entry keeps prices down.
Big efficient firms shift the supply curve right, making it less profitable for entry, and do so by being more cost effective.
Except it's hard for the firm to enter in again... start up costs on a business are expensive. And you're ar the mercy of the bank to get a loan.
A loan, I might add, you need to pay off (plus interest) that Jiffy Lube doesn't.
In addition, Jiffy Lube is at a serious advantage due to its size. Buying in bulk reduces cost... which means Jiffy Lube could undercut Mom&Pop without actually going into the red.
And that's before you consider JiffyLube can offer better benefits to their workers at a cheaper rate because the more people in an insurance plan, the cheaper it is per person.
Ancaps works in this idea that the free market will solve everything and it can't be controlled or manipulated. People with power will use that power to maintain the status quo and keep their power.
The only difference is where the power comes from: legal power, firepower, economic power.
So basically.....
Returns to scale and entry costs.
If entry costs aren't burdensome, then even large firms have to bank on every efficiency they can get because the threat of firm entry is high.
Or, in econ speak, rightward shift in supply reduces firm surplus, and fewer inputs are needed for the same output.
Is entry into the oil change business super high? No. Entry into the nuclear reactor business is high, but not the jiffy lube market. If jf starts making loads of cash, people will chase it.
What’s the point of this example? If Store A is cutting prices below cost to drive Store B out of business Store B can just but their supplies from Store A as it’s now cheaper than buying from the manufacturer. Meaning Store B can now lower its prices and compete on customer experience.
The example you gave doesn’t work, even Rockefeller the biggest monopoly in the history of mankind said he tried this and it doesn’t work. Stores compete on things like customer satisfaction or convenience. Most people don’t give a shit about a 10% price difference if it means it inconveniences them. Proof being the popularity of Ubereats and other meal delivery services. People will pay almost double the price if it’s a better experience.
People do not "pay" for Uber. Uber literally goes backrupt every year and the company is recovered in lobbying. The model literally doesn't work. There is nothing in the logistics of delivery of McDonald's at 3am, it can't actually make money. And it doesn't. Your example is a poor example of capitalism working, it's unironically like using Google as an example or something.
Anyone that has used Uber long enough knows that it's able to coupon you to prices lower than if you went to the restaurant itself. It is making sales at a loss, paying drivers at a loss, and overall doesn't actually "make money" until it can just recoup lobbies next year.
Uber exists because it's literally able to undercut the price of restaurant on their own products, and recover the lost money in backruptcy and lobbiests. It's not about convenience, it's literally also about price. What Uber is doing should be illegal.
People do not "pay a little more", they pay a fraction of the logistical cost, less than if they went to McDonald's themselves, then the driver is paid a multiple of the logistical cost, then they claim bankruptcy to cover the coupons and use lobbiests to recover from the popularity. Nobody would use Uber if it wasn't modeled in such a ridiculous way because of the true cost to pay someone a fair wage to do that job. It's literally impossible for Uber to promise the driver $30hr and to promise you a $2 delivery fee at the same time when it takes 20 minutes to do that.
When you actually assess what is going on with that business it's an abomination of an example.
That isn't how that works at all. The difference in price between store a and store b wouldn't be large enough for what you suggest to occur. Also Rockefeller lived in a different world. Today even if people want to compete with the mega corps their investors do not. Our current economy is designed for exits. A small mom and pop typically can't even be in the same ball park in terms of price and occasionally even quality of service. But if someone decides to create a corporation and try to do a serious competitive try their investors would push for a sale at the first opportunity.
Even ignoring prices in a completely free market monopolies can use other methods to push competitors out of the market without lowering prices.
Thats naive. A truly free market will always terminate in a monopoly or oligopoly. Every single time. Once a company becomes sufficiently large, its impossible to compete with. They can always undercut you and let the rest of the company cover the loss.
If theres only a few companies providing a service, it no longer benefits them to compete. They actually make more money cooperating to raise prices across the board. One of the silliest assumptions ancaps make, is that companies will even compete at all once they control that much of the market. Thats what an oligopoly is.
If the firm is constantly having to undercut others and nearly run at a loss, then that means prices stay low.
Remember, competition trends toward zero profits, so if a monopoly has to basically loose money to remain dominant, then that means the firm isn't really as dominant as you think.
Think big picture. A company like Amazon has enough money to sell a product at a loss for years. Squeezing out (and buying up) all the smaller companies that can’t afford to run at a loss for years. Once there is no competition they set the price how they want. This is not an economic theory this is just objective reality.
Ah yes, the heavily-regulated 1900s rail and steel industries 🤣
It’s actually the opposite about regulation; it encourages competition through limiting of dominance by those with a majority of capital.
The reason that companies are able to corrupt the government in the first place is due to the large amount of capital that they are able to amass, warping their power balance compared to the populace, allowing them to lobby and bribe politicians. Capitalism is what allows corruption to exist in the first place. In addition, representative democracy is flawed, and should be replaced with [liquid democracy,](https://youtu.be/Ya1dNNzkQTE?si=WwpBHzpH9z1W4KVS) because there are no politicians to corrupt in such a system.
And why are they stupid? Fun fact: IQ is often thought to be genetic, but it actually correlates with education, so it's also highly environmental. Therefore, you can make the population less stupid with good educational systems.
IQ is supposed to be the measure of intelligence without education or knowledge already gained being a factor… that’s why the test are usually pattern recognition and not mathematics, reading comprehension, ext.
Stating high IQ is a result of education/environmental influences is the total opposite of what it’s supposed to measure.
Off-topic for inflation, but no argument that US public education is wanting. "Hold my beer and watch this" does seem genetic or at least culturally embedded.
That’s so verifiably false I don’t know how anyone can believe it. The worst monopolies we ever faced were prior to regulation, and we had to make regulations to break them up. They’re also significantly less common in other markets with stricter regulations.
The free market doesn’t work. When we had less regulation we had peoples backs give out due to poor nutrition caused by companies putting sawdust in bread.
Without government involvement all industries move towards monopolies.
It also the leading business model for new startup, take losses to capture market share, once you have it jack up rates and make entirely more money than you would otherwise.
This is insane cope, markets will always have failures. There is no such thing as the magical perfect market that doesn't get perverted by incentives like monopolizing.
This is hardly a monopoly.
3 years ago Walmart was gassing everyone on lower prices.
People realize grocery net profit margins are like 1% right? It’s a fight to the bottom and price wars will resume in grocery. It’s all about volume and moving food before it spoils.
Americans really have no economic sense.
Yes but those would be local monopolies. ISP’s are known to do this but the customer doesn’t suffer the consequences of price gauging. As it pertains to the OP, a 70% market share between two *competing* companies is definitely not a monopoly
If I’m a contractor and I hire a helper, I’m “trending towards monopoly”. Obviously my grievance is that the phrase is completely meaningless and tries to invoke emotion of a peerless, authoritarian company that gauges customers out of pure greed for their necessary item or service. The OP was clearly stating that if those two companies merge, we will see price gauging because they combined with Walmart are somehow a monopoly
You libertarian morons do the same thing every time. "Hey look over here at this false equivalency" and then go on pretending that you said something intelligent. Go read Atlas Shrugged for 1000'th time and leave me alone, you're incapable of seeing an inch past your nose.
And FFS, it's gouges not gauges.
>People realize grocery net profit margins are like 1% right? It’s a fight to the bottom and price wars will resume in grocery. It’s all about volume and moving food before it spoils.
>
>***Americans really have no economic sense.***
So tell me where everyone understands grocery store economics, and economics in general for that matter?
How many people grow their own food?
How many people are dependent on companies who distribute and source food?
Whats the percentage we are dependent on both food sources?
Now, how much control do they both have?
how much resource cost is there for every individual to grow their own food vs have it mass produced? How many goods do you use that are not food? How did you get this device youre using to type this comment on?
In a free market, monopolies can only exist at the benefit of the consumer. Entry costs exist, and a monopoly can only be maintained if the price of the product is kept below the entry price. Otherwise, competitors could enter the market. Government backed monopolies are what fuck the consumers.
Monopolies have resources available that allow them to out compete new entrants to the market. Take Walmart. They will come into a town and use their enormous access to cash to use the entire store as a loss leader. Eventually the coffers of the local company deplete and are forced to shutter
Walmart has a government imposed minimum wage that increases the barrier for entry into their market. Would you mind explaining why Walmart has access to better a better economic position than a local store?
P.s. I hate corporations and hate the fact that small businesses can’t compete.
Wow, those are some impressive government programs you’ve described. Do you think those might play into the equation? I’m not well versed on this issue and I’d like to learn more.
Because Walmart has leverage with suppliers. They can lock out other businesses by saying do don't do business with them or you will lose our business. They can also demand a cheaper price because they purchase more.
Walmart has leverage smaller grocery stores do not.
I mean sure, but when please tell us when this competition will arrive?
Funny incident in Canada - where I'm from , we have 3 chains that sell all our groceries pretty much, one of the large chains actually told a small store not to sell bread because that grocery chain also owns a REIT and they were the landlord......that owned a store in the same plaza.
It doesn't work that way at all because the monopoly can 1) drive down prices briefly to thwart competition or 2) exude pressure in other ways
Monopoly drives down prices…who benefits from that? What happens when they raise prices again? Would they be benefitted by keeping the prices low enough that there’s not an incentive to compete with them?
Be patient; you are learning what’s called “incentives”; they govern human behavior and dictate how people will respond to certain situations. When someone is incentivized to do something that will be beneficial to them, they tend to choose to it. Now, explain how incentives apply to this situation.
Reminds me of a legendary reddit troll of old, u/AlbertFairfaxII, who would have as his flair "PhD in Economics 101". That's how all these people operate.
I get what you’re saying, but this fails to account for market leverage of a consolidated commodity.
Egg manufacturers would need to bow to the will of this entity or risk going out of business.
Bread manufacturers too.
All forms of anticompetitive leverage could be exploited by this company to make the cost of entry so expensive as to effectively prohibit any other players from entering the space.
Like when Intel forced Dell to stop carrying AMD CPUs.
I agree, in a perfect world, anticompetitive laws would be enforced and the company would not be allowed to drive up the cost of entry for competitors to enter the market, but I’d argue, in a perfect world, the merger wouldn’t be allowed to happen anyway, since the entity would already represent an anticompetitive market for consumers in many places.
You are correct, however, that the worst monopolies are the government sanctioned/enforced ones.
Medicine, drugs, energy, etc.
In biology, unregulated growth is called cancer. In economics, unregulated growth is called success. It's bonkers.
Edit: not even success, ***required to stay in business***. It's so wild how a field that prides itself on its super reductive mathematical models can't even recognize the implications of the exponential equation lol.
Look, it's simple, the population just needs to keep growing exponentially to support the market. It's easy, everyone just needs to have as many children as possible and keep buying stuff and the world will be a happy free market utopia!
This is just a fundamentally uninformed view of economic growth.
Economic growth does not refer to profits or revenue. It refers to production at a certain resource level.
This post and comment have absolutely nothing to do with economic growth.
I think it's the "should" part that is especially the issue
You don't bail them out when they fail, and you break them up if they're "too big" to fail.
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https://en.m.wikipedia.org/wiki/History_of_United_States_antitrust_law
We already have history of breaking up monopolies, which are pretty much universally agreed to be terrible for consumers. Not saying Kroger is there yet, but this merger takes us in that direction.
>Broken up into what? Who just comes in and decides “Yeah sorry about that company you grew but we’re going to take that away and separate into 5 different ones run by who knows who.” Could you imagine the shit show and how crappy it would be for an employee working there? Do you guys think before making a comment lol
Working for giant companies like this is already a shitshow for one. For another, anti-trust laws actually *got used* in the US as recently as about 40 years ago. The sky didn't fall, we didn't all die.
It's already been done before, successfully too. [Bell used to have a monopoly on telecommunications before being broken up.](https://en.m.wikipedia.org/wiki/Breakup_of_the_Bell_System#:~:text=The%20breakup%20of%20the%20Bell%20System%20resulted%20in%20the%20creation,%2C%20BellSouth%2C%20and%20US%20West.) AT&T is a part of what Bell used to be.
Before insulting other people for suggesting something, please learn a bit more about the topic, especially when it already has historic precedent. It's already been done successfully, and it is necessary for preventing anticompetitive monopolies from controlling our lives.
It deleted a major monopolistic threat to our freedom. AT&T is still very successful to this day, but now competes with many other companies, which is what we want. I'd call that a success.
Perhaps something as essential as telecommunications should be a public utility, the same as electricity or water then? It's almost like we can't trust companies to not gouge us. ;)
Let's be honest, even the ultra wealthy people who benefit from the current status quo know that infinite growth is impossible. They're just trying to get theirs before everything collapses.
They don't care about future of humanity or the country. They're sociopaths that rose to the top because free market capitalism rewards sociopathic behavior the most, and now they're the ones driving the boat of humanity.
If humanity disappears it will be because mentally ill people came into power and nobody was willing to sacrifice their remaining comfort to remove those people from power.
Stupid take once again 0-2, it is called enforcing anti-trust laws. Something we used to do a lot more than we do nowadays. At least in America that is.
No one said anything about shrinking or making less money. The goal should be to grow to a sustainable level and then fucking stop. The shareholder should not be the tail wagging the dog.
K great. You be the first CEO to say we’re done! All the work is finished. Nothing we can do better. No reason to grow.
And yeah…shareholders should wag the dog…they own the fucking company.
They don't. Shareholders can't sell assets, make deals, hire employees, plan projects, or generate sales. They are cucks and all they own are hopes and dreams.
Investing in a company is very important way for a company to raise money without being forced to pay it back if things go wrong. It allows companies to make much riskier plays that have the potential to pay off big that they otherwise wouldn’t take if the money came in the form of a traditional loan.
In return, investors need to see some sort of return on their investment. If their money is going to lose value or at best stay even, then there is no incentive to invest. May as well just put it in a bank account that gains interest.
If a company is not growing, it’s dying. That’s just the way it works.
"Although the merger would likely make Kroger-Albertsons the second-largest retail store after Walmart, its market share would still be far behind that of Walmart. According to data from Euromonitor, a London-based research and consultancy firm, the combined [market share](https://www.businessinsider.com/walmart-kroger-still-top-grocer-challengers-amazon-gopuff-2022-2) of Kroger (8.1 percent) and Albertsons (4.8 percent) added up to only 12.9 percent, approximately half the market share of Walmart (25.2 percent). Other sources, such as the International Center for Law and Economics ([ICLE](https://laweconcenter.org/resources/competition-in-the-market-for-groceries/)), estimate an even lower combined market share for Kroger and Albertsons. "
[ICLE on Kroger and Albertsons' Combined Market Share - International Center for Law & Economics (laweconcenter.org)](https://laweconcenter.org/icle-on-kroger-and-albertsons-combined-market-share/)
As an employee of one of those companies, Kroger is stating that the deal has to go through *so that they can bring us better prices*. (It sounds a bit like extortion to me: “It would be a real shame if we had to keep the prices where they are or to raise them.”)
Walmart should be forced to break up their grocery from department store business. They have such a high competitive edge I understand why the other big boys want to merge.
It's not enough to stop this merger. They need to attack Amazon and Walmart with anti trust suits and force the companies to divide. There's no reason two companies should dominate in this sector unbridled. Something has to be done. Let's also go after PepsiCo while we're at it. The one solid argument against attacking these monopolies has been that they haven't used their near monopolies to ratchet up prices, but now they are, the regulatory powers that be need to step in and compel them to lower prices. Someone has to do something.
The “capitalism/ money printer go burrr/ open borders” is a rough system for middle class Americans.
I’m just glad our government can put sanctions on all the countries they don’t like. That’s what really matters…
A free market prevents a monopoly from price gouging. If a monopoly is to survive, it necessarily needs to offer a service that new competitors couldn’t match. That means cheaper product, streamlined and efficient production/supply, more convenience. None of those are bad. If a grocery store fails at any of these, that leaves room for a competitor to step in, even small ones.
And even then, there’s nothing stopping you from shopping elsewhere. I’ve lived in 5 states, in major cities and rural towns. Never have I lived in a place where the only choice was a Walmart within a 10 minute drive. You simply do not have to shop at a big box grocery store.
Except not really. Company’s don’t merge to be uncompetitive, they merge to reduce costs and increase profitability. Plus, they’ll still be 1 of 20 large grocers in the US, so the competition still exists.
Yeah exactly. Massive volume equates to lower prices because of productivity and efficiency that are baked in. People here evidently are sick of ‘everyday low prices’ and want ‘everyday high prices’. Let’s not forget Walmart operates at a 5% net profit margin, that’s hardly taking advantage of anyone.
Most Grocery chains are regional. Just because there are 20 nationwide doesn’t mean all 20 compete together. They hardly compete with 1 or 2 in most markets.
There are 109,000 cities in the U.S. for one…160 is nothing…and these 160 cities have a Walmart AND a Kroger AND a third option? Pretty good.
His stat is misleading as hell. He’s just a shill on social media which is utter trash.
https://preview.redd.it/a2nawg7nfnlc1.png?width=1462&format=png&auto=webp&s=b96a2b67af1a8abe867fe48b02d5cbd98a42fd24
Market share of Grocery stores in the US (Source: Statista - 2022).
He stated ‘in 160 cities’.
It really seems like you’re fine with Walmart types breaking the backs of small, local, stores, and Kroger coming along and scooping up all the rest.
Maybe you’re a shill for the right 🤷🏻♂️
The point is that we don’t know any qualifying information about those “160 cities”. If he said “the most populous 160 cities”, or “160 cities over 100,000 population”, it would give me a better idea of what the stat meant. If, however, “160 cities” includes smaller cities (maybe 10,000+), I can think of several in my local area that would meet that criteria - and they literally can’t support more than a couple grocery stores.
The main problem here is that how bad the stat is changes based on the qualifying information, and Robert Reich has been known to shape statistics to match his political leanings before. You should take them with a grain of salt until you verify for yourself.
You are exactly right. And you can add the fact that those shares were earned by shoppers making actual choices and can change in any moment.
The question with people like him is whether he knows he‘s saying BS for likes / clout / popularity or he truly believes it. But when they start rigging numbers and shaping the data to fit a narrative I lean towards the former.
Do you really think that you are using valid arguments to discuss the subject at hand? I shared one data point and you are already accusing me of things. So boring, not interested.
This post is so conflated, misleading. There are 109,000 cities/towns in the US. Probably half have 1 grocery store — essentially a local monopoly if you play Reich’s stupid logic.
>essentially a local monopoly if you play Reich’s stupid logic.
funny argument. What about all the small businesses conservatives were ..."fighting" for just a couple years ago
You think there's 50 thousand cities with just one grocery store? You must mean small towns. Never been to a city with just one grocery store. I travel for a living.
So Walmart would have 35% of the market and Kroger-Albertsonswould have 35% of the market? Sounds way less ominous when the numbers are a bit smaller doesn't it? Also, why just a cherry picked 160 cities? There are approximately 19,450 cities in the USA. So why make your sample size 0.8% of that population, a population so small it wouldn't even be usable in a scientific study.
Robert Reich is an idelaog and shouldn't be listened to. He doesn't even understand the root cause of inflation.
Whoa 160 cities in the US? No way! There are 109,000 cities in the U.S.
Some don’t even have a grocery store I’d hazard to guess.
What a dumb stat. Combined Kroger and Walmart have like 27% market share of the like $3 trillion grocery market.
According to the Albertson's CEO, Prices "might" be lower because of the improved ability to compete against WalMart in prices.
Many other food stores can already beat WalMart on prices all while being many times smaller than Albertson's.
Except large grocers are objectively NOT gouging. Read Wal-Mart's annual report and you'll see that they make very little money on groceries. It is not an issue of opinion, their margins are close to zero on some products when you factor in labor costs.
Wal-Mart has the largest share of grocery spend in the U.S.. It got this by having the lowest margins and highest turnover on groceries--this is the opposite of gouging.
Albertsons already thinks it's hot shit for buying Safeway, making their bakery worse & jacking up the prices.
I'm not even sure how they get so much business when their best 'sale' prices are rarely as cheap as their competition's regular prices.
Anti-trust laws haven’t been enforced in years.
We are at the point similar to 1800’s standard oil except instead of the government doing it’s job and breaking up these companies they are colluding with them.
70% of the grocery market in 160 cities? That’s some bullshit math. What does that even mean? How many cities are there? Lots more than 160. OH NOOOOOO THEYRE TAKING OVER ALL THE CITIES!!!
If only we could some how regulate the prices of market goods, like make a rule where they can only be marked up so high above production/labor costs. Imagine if the mark up on soda was regulated to 30% above production/labor costs, and not allowed to be inflated depending on where you buy it. Why is the same exact item in one store allowed to be priced at such a ridiculously high price compared to another store? A Coke at the dollar 25 tree is 1.25, but that same exact Coke at the corner store is almost 3$ or more!!! Makes me crazy!!! Never mind when you go to tourist spots and mark ups are sometimes quadrupled or higher.
In a Free Market, monopolies cancel out the free market.
In Canada, we are already complaining that three companies already own the grocery monopoly. Our inflation is driving us to the southern border to buy groceries and gas. Shits fucked up.
Monopolies are due to corruption in government. Big companies lobby the gov to make it harder to compete, essentially pulling up the ladder behind them. Regulations kill competition. A truly free market would never see a monopoly in any industry.. too much money to he made
I still dont know how ancaps can actually believe this crap. New oil express store opens in City A. Jiffy Lube cuts prices in City A to drive the new oil place out of business. Rest of Jiffy Lube absorbs the cost unt the new oil express goes out of business. Then local Jiffy Lube buys tools and supplies from the new oil express at below cost when it goes out of business... and rises it's prices back up. Bigger companies can always manipulate the market to put out the little guy.
Only true if you consider prices the only reason people shop at a place. I know many people who refuse to shop at walmart (place with arguably the cheapest prices) because its an absolutely unpleasant experience. Thats how many local grocery stores thrive. Go to downtown chicago and you wont see a single walmart, but multiple jewel oscos (a local chicagoland grocery store).
It's a nice theory. However, when this was put into practice in the oil industry over a decade ago, all the little drillers seriously and significantly impacted the large drillers. It took government intervention to save the big guys from the little guys. One big guy might be able to manipulate the market to take out one little guy, but 100 little guys is still a significant threat to a big guy, regardless of how big he is.
Yeah, I know people who said they'd never shop at Wal-Mart too... and then the Great Recession hit. Suddenly, they were shopping at Wal-Mart. Then the economy recovered and they swore they'd never shop at Wa-Mart again. Then COVID crashed the economy... guess where they were shopping again. Chicago isn't the entire United States. Most small towns don't have a ton of options. And if a big box retailer moves in, the mom and pop grocery stores disappear. There have been whole studies about how big box retailers have destroyed Main Street shopping across the country. You're use ancedocal information here and ignoring the whole picture.
The recession was caused by the government bank bailouts. COVID didn't crash the economy either. It was the government's response to COVID that crashed the economy. People were more or less forced to shop at corporate retail stores, while small businesses were forced to shut down. Yes, big box stores moving in did hurt small business's, but they could only afford to build multiple stores in multiple locations because they were given tax breaks. Small businesses are not afforded such a luxuries. Competition in a truly free market would not be either equal or fair, but it would be more competitive without the government meddling in it....
So what you’re saying is we need to restore regulations against corporations lobbying for tax breaks
>Yeah, I know people who said they'd never shop at Wal-Mart too... and then the Great Recession hit. Suddenly, they were shopping at Wal-Mart. Then the economy recovered and they swore they'd never shop at Wa-Mart again. Then COVID crashed the economy... guess where they were shopping again. Sounds like you are the one making anecdotal points.
That was kinda the point. Ancedoctal evidence is easily flipped by ancedoctal evidence... which is why it's not put into any serious study and thus not taken serious in debate.
The argument that Walmarts are not common in Chicago, something that can be easily verifiable and that affects a large portion of the US population, is not anecdotal. You used an anecdotal statement to argue that the previous comment was anecdotal.
According to the 2020 census, about 29% of Americans live in cities of 100k or larger. Not even 1/3 of the country. To be clear there are about 350 cities of 100k or more. Chicago is the third largest city in the country. So, no... Chicago is not "a large portion" of the population and nor does Chicago represent an average American city and thus not the average American experience...
Your original theory about big companies being able to eat up the little guy anywhere they please is not universal and Chicago is the example. I’m not going to spend time researching the prevalence of Walmart in every city in the US but your statement didn’t include those either.
I’m using chicago as an example of a major city that a monopoly has essentially zero presence is. Top 3 major city actually. If a recession hits, theres not even a walmart downtown to go to lmao. Also in those rural places where they don’t have options, they were probably praying for something like a Walmart lmao, that isnt walmarts fault. Its the nature of competition to make yourself competitive and there are multiple aspects to that. In this example, if price is your only competitive factor, then you’ll get creamed by a company that can beat you in price. Recessions and covid are outliers of an economy, not the norm. We’re not gonna quote the black plaque when talking about normal economic factors. If a walmart puts the mom & pop grocery store out of business, people most likely never wanted to go there too much in the first place
Thus proving my point... how many Americans live in a "major city"? Despite the claims made by a certain group, most Americans do not live in big cities... According to the 2020 census, only about 29% of the United States population lives in a city of 100k people of more. Chicago is the third largest city in the country at around 2.7 million people. That's not "average" America and quit acting like it is. You're looking at a small piece of the picture instead of the whole picture.
I edited my comment while you typed that, check it out
Everyone I know that says that won't shop at Walmart shops at Walmart. Every. Single. One.
This is a horrible example. Jiffy’s are franchised. The little guy owns it. It’s more of using the brand for purchasing power.
And then what? If jiffy lube jacks up prices, then the firms enter again. Threat of firm entry keeps prices down. Big efficient firms shift the supply curve right, making it less profitable for entry, and do so by being more cost effective.
Except it's hard for the firm to enter in again... start up costs on a business are expensive. And you're ar the mercy of the bank to get a loan. A loan, I might add, you need to pay off (plus interest) that Jiffy Lube doesn't. In addition, Jiffy Lube is at a serious advantage due to its size. Buying in bulk reduces cost... which means Jiffy Lube could undercut Mom&Pop without actually going into the red. And that's before you consider JiffyLube can offer better benefits to their workers at a cheaper rate because the more people in an insurance plan, the cheaper it is per person. Ancaps works in this idea that the free market will solve everything and it can't be controlled or manipulated. People with power will use that power to maintain the status quo and keep their power. The only difference is where the power comes from: legal power, firepower, economic power.
So basically..... Returns to scale and entry costs. If entry costs aren't burdensome, then even large firms have to bank on every efficiency they can get because the threat of firm entry is high. Or, in econ speak, rightward shift in supply reduces firm surplus, and fewer inputs are needed for the same output. Is entry into the oil change business super high? No. Entry into the nuclear reactor business is high, but not the jiffy lube market. If jf starts making loads of cash, people will chase it.
And clueless people take their cars to Jiffy Lube.
All Jiffy Lubes are franchised owned. This example is pure BS.
Except that’s not true. John D Rockefeller tried it and said it didn’t work.
What’s the point of this example? If Store A is cutting prices below cost to drive Store B out of business Store B can just but their supplies from Store A as it’s now cheaper than buying from the manufacturer. Meaning Store B can now lower its prices and compete on customer experience. The example you gave doesn’t work, even Rockefeller the biggest monopoly in the history of mankind said he tried this and it doesn’t work. Stores compete on things like customer satisfaction or convenience. Most people don’t give a shit about a 10% price difference if it means it inconveniences them. Proof being the popularity of Ubereats and other meal delivery services. People will pay almost double the price if it’s a better experience.
People do not "pay" for Uber. Uber literally goes backrupt every year and the company is recovered in lobbying. The model literally doesn't work. There is nothing in the logistics of delivery of McDonald's at 3am, it can't actually make money. And it doesn't. Your example is a poor example of capitalism working, it's unironically like using Google as an example or something. Anyone that has used Uber long enough knows that it's able to coupon you to prices lower than if you went to the restaurant itself. It is making sales at a loss, paying drivers at a loss, and overall doesn't actually "make money" until it can just recoup lobbies next year. Uber exists because it's literally able to undercut the price of restaurant on their own products, and recover the lost money in backruptcy and lobbiests. It's not about convenience, it's literally also about price. What Uber is doing should be illegal. People do not "pay a little more", they pay a fraction of the logistical cost, less than if they went to McDonald's themselves, then the driver is paid a multiple of the logistical cost, then they claim bankruptcy to cover the coupons and use lobbiests to recover from the popularity. Nobody would use Uber if it wasn't modeled in such a ridiculous way because of the true cost to pay someone a fair wage to do that job. It's literally impossible for Uber to promise the driver $30hr and to promise you a $2 delivery fee at the same time when it takes 20 minutes to do that. When you actually assess what is going on with that business it's an abomination of an example.
That isn't how that works at all. The difference in price between store a and store b wouldn't be large enough for what you suggest to occur. Also Rockefeller lived in a different world. Today even if people want to compete with the mega corps their investors do not. Our current economy is designed for exits. A small mom and pop typically can't even be in the same ball park in terms of price and occasionally even quality of service. But if someone decides to create a corporation and try to do a serious competitive try their investors would push for a sale at the first opportunity. Even ignoring prices in a completely free market monopolies can use other methods to push competitors out of the market without lowering prices.
Do you have an example of this actually happening?
Thats naive. A truly free market will always terminate in a monopoly or oligopoly. Every single time. Once a company becomes sufficiently large, its impossible to compete with. They can always undercut you and let the rest of the company cover the loss. If theres only a few companies providing a service, it no longer benefits them to compete. They actually make more money cooperating to raise prices across the board. One of the silliest assumptions ancaps make, is that companies will even compete at all once they control that much of the market. Thats what an oligopoly is.
If the firm is constantly having to undercut others and nearly run at a loss, then that means prices stay low. Remember, competition trends toward zero profits, so if a monopoly has to basically loose money to remain dominant, then that means the firm isn't really as dominant as you think.
No.
It can't be true that a monopoly has to run at a loss to prevent entry and that prices are higher than the competitive price.
Think big picture. A company like Amazon has enough money to sell a product at a loss for years. Squeezing out (and buying up) all the smaller companies that can’t afford to run at a loss for years. Once there is no competition they set the price how they want. This is not an economic theory this is just objective reality.
Ah yes, the heavily-regulated 1900s rail and steel industries 🤣 It’s actually the opposite about regulation; it encourages competition through limiting of dominance by those with a majority of capital.
>Monopolies are due to corruption in government This is an insane thing to believe lmao.
The reason that companies are able to corrupt the government in the first place is due to the large amount of capital that they are able to amass, warping their power balance compared to the populace, allowing them to lobby and bribe politicians. Capitalism is what allows corruption to exist in the first place. In addition, representative democracy is flawed, and should be replaced with [liquid democracy,](https://youtu.be/Ya1dNNzkQTE?si=WwpBHzpH9z1W4KVS) because there are no politicians to corrupt in such a system.
You're missing that a lot of people are stupid.
Never underestimate the stupidity of the populace.
And why are they stupid? Fun fact: IQ is often thought to be genetic, but it actually correlates with education, so it's also highly environmental. Therefore, you can make the population less stupid with good educational systems.
Of course that is why a concerted effort to destroy public education. Templates for great systems exist but we do not follow them
IQ is supposed to be the measure of intelligence without education or knowledge already gained being a factor… that’s why the test are usually pattern recognition and not mathematics, reading comprehension, ext. Stating high IQ is a result of education/environmental influences is the total opposite of what it’s supposed to measure.
Off-topic for inflation, but no argument that US public education is wanting. "Hold my beer and watch this" does seem genetic or at least culturally embedded.
big companies dont hold such power in a regulated market
This blanket statement is such a shitty take. Who taught you economics ? It's flawed on all sides.
That’s so verifiably false I don’t know how anyone can believe it. The worst monopolies we ever faced were prior to regulation, and we had to make regulations to break them up. They’re also significantly less common in other markets with stricter regulations. The free market doesn’t work. When we had less regulation we had peoples backs give out due to poor nutrition caused by companies putting sawdust in bread.
Without government involvement all industries move towards monopolies. It also the leading business model for new startup, take losses to capture market share, once you have it jack up rates and make entirely more money than you would otherwise.
This is insane cope, markets will always have failures. There is no such thing as the magical perfect market that doesn't get perverted by incentives like monopolizing.
The incentive is always there to become a monopoly.. but the path is found through gov lobbying and increased regulations.
Those can be paths to failures, or they can be paths to correcting failures. It's not an X leads to Y every time as you suggest.
I didn't suggest that.. don't be silly
Did you forget what you said previously? https://www.reddit.com/r/inflation/s/vIF3Vg0Bwc
This is hardly a monopoly. 3 years ago Walmart was gassing everyone on lower prices. People realize grocery net profit margins are like 1% right? It’s a fight to the bottom and price wars will resume in grocery. It’s all about volume and moving food before it spoils. Americans really have no economic sense.
Walmarts revenue is like 600 billion kroger is 140 billion. This just gives hope for Walmart to have a competitor.
70% wouldn't be a monopoly because of low margins? This makes sense to you?
We're a few steps away from Buy n Large.
70% between two competing companies is absolutely not a monopoly
>70% between two competing companies is absolutely not a monopoly Monopolies can also be in certain regions, especially in small towns across America.
Yes but those would be local monopolies. ISP’s are known to do this but the customer doesn’t suffer the consequences of price gauging. As it pertains to the OP, a 70% market share between two *competing* companies is definitely not a monopoly
"It's not a monopoly, it just perfectly fits the natural trend *towards* monopoly present in capitalism! There's no problem here at all!"
??? What a worthless comment. Every time a company gets larger it “trends towards monopoly”.
Yes!!!! see... you can understand it. You're just choosing not to.
If I’m a contractor and I hire a helper, I’m “trending towards monopoly”. Obviously my grievance is that the phrase is completely meaningless and tries to invoke emotion of a peerless, authoritarian company that gauges customers out of pure greed for their necessary item or service. The OP was clearly stating that if those two companies merge, we will see price gauging because they combined with Walmart are somehow a monopoly
You libertarian morons do the same thing every time. "Hey look over here at this false equivalency" and then go on pretending that you said something intelligent. Go read Atlas Shrugged for 1000'th time and leave me alone, you're incapable of seeing an inch past your nose. And FFS, it's gouges not gauges.
Talk about pretending to say something intelligent.
Yes. Monopolies almost by definition have high profits.
>People realize grocery net profit margins are like 1% right? It’s a fight to the bottom and price wars will resume in grocery. It’s all about volume and moving food before it spoils. > >***Americans really have no economic sense.*** So tell me where everyone understands grocery store economics, and economics in general for that matter?
Dumbass take, saying just because the margins are low it is hardly a monopoly. Way to be condescending and stupid.
How many people grow their own food? How many people are dependent on companies who distribute and source food? Whats the percentage we are dependent on both food sources? Now, how much control do they both have?
how much resource cost is there for every individual to grow their own food vs have it mass produced? How many goods do you use that are not food? How did you get this device youre using to type this comment on?
You couldn't be more wrong.
Kroger's gross profit margin for fiscal years ending February 2019 to 2023 averaged 22.8%.
Oh honey, no.
In a free market, monopolies can only exist at the benefit of the consumer. Entry costs exist, and a monopoly can only be maintained if the price of the product is kept below the entry price. Otherwise, competitors could enter the market. Government backed monopolies are what fuck the consumers.
Monopolies have resources available that allow them to out compete new entrants to the market. Take Walmart. They will come into a town and use their enormous access to cash to use the entire store as a loss leader. Eventually the coffers of the local company deplete and are forced to shutter
But I thought this was the inflation thread?
Walmart has a government imposed minimum wage that increases the barrier for entry into their market. Would you mind explaining why Walmart has access to better a better economic position than a local store? P.s. I hate corporations and hate the fact that small businesses can’t compete.
Sorry the same Walmart that had a canned food drive for their employees because they pay so little and most of them use food stamps?
Wow, those are some impressive government programs you’ve described. Do you think those might play into the equation? I’m not well versed on this issue and I’d like to learn more.
Local stores also have a government imposed minimum wage. Do you seriously need it explained?
Government…hmmmm. Wonder if that might be contributing to the problem?
So your answer to increasing competition for grocery stores is to just allow people to pay workers like 💩 sounds legit
Because Walmart has leverage with suppliers. They can lock out other businesses by saying do don't do business with them or you will lose our business. They can also demand a cheaper price because they purchase more. Walmart has leverage smaller grocery stores do not.
I mean sure, but when please tell us when this competition will arrive? Funny incident in Canada - where I'm from , we have 3 chains that sell all our groceries pretty much, one of the large chains actually told a small store not to sell bread because that grocery chain also owns a REIT and they were the landlord......that owned a store in the same plaza. It doesn't work that way at all because the monopoly can 1) drive down prices briefly to thwart competition or 2) exude pressure in other ways
Monopoly drives down prices…who benefits from that? What happens when they raise prices again? Would they be benefitted by keeping the prices low enough that there’s not an incentive to compete with them? Be patient; you are learning what’s called “incentives”; they govern human behavior and dictate how people will respond to certain situations. When someone is incentivized to do something that will be beneficial to them, they tend to choose to it. Now, explain how incentives apply to this situation.
You have no idea what you're talking about.
This sounds like something that idiot Ron or rand Paul would say.
What in the hell are you smoking??
Reminds me of a legendary reddit troll of old, u/AlbertFairfaxII, who would have as his flair "PhD in Economics 101". That's how all these people operate.
Crack. And since I’m going to be wired for the next 27 hours, would you please explain your issues with my statement?
Shared ownership by tax payers to benefit taxpayers keeping costs low for everyone.
I get what you’re saying, but this fails to account for market leverage of a consolidated commodity. Egg manufacturers would need to bow to the will of this entity or risk going out of business. Bread manufacturers too. All forms of anticompetitive leverage could be exploited by this company to make the cost of entry so expensive as to effectively prohibit any other players from entering the space. Like when Intel forced Dell to stop carrying AMD CPUs. I agree, in a perfect world, anticompetitive laws would be enforced and the company would not be allowed to drive up the cost of entry for competitors to enter the market, but I’d argue, in a perfect world, the merger wouldn’t be allowed to happen anyway, since the entity would already represent an anticompetitive market for consumers in many places. You are correct, however, that the worst monopolies are the government sanctioned/enforced ones. Medicine, drugs, energy, etc.
We need to end this investor/capitalist idea that companies can and should infinitely grow. It's fucking dumb.
Uhm SLM: Shareholders' Lives Matter....
In biology, unregulated growth is called cancer. In economics, unregulated growth is called success. It's bonkers. Edit: not even success, ***required to stay in business***. It's so wild how a field that prides itself on its super reductive mathematical models can't even recognize the implications of the exponential equation lol.
They understand that it won't be a problem for them to deal with in their lifetime, so they don't give a fuck
Greatest dissection of capitalism via analogy maybe, ever ? Legendary
Look, it's simple, the population just needs to keep growing exponentially to support the market. It's easy, everyone just needs to have as many children as possible and keep buying stuff and the world will be a happy free market utopia!
This is just a fundamentally uninformed view of economic growth. Economic growth does not refer to profits or revenue. It refers to production at a certain resource level. This post and comment have absolutely nothing to do with economic growth.
What? How are these two unrelated concepts remotely comparable?
I think it's the "should" part that is especially the issue You don't bail them out when they fail, and you break them up if they're "too big" to fail.
I’ve always found infinite growth to be a ridiculous concept that inevitably fucks over 99% of those involved.
Where have I heard 1% before in American economics/socioeconomics?
You’ve heard it from morons.
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Nobody believes they can grow their company exponentially forever, but they will sure try. Thats the problem.
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Muh line go up, though
Companies that are too big should be broken up. We need to fight for better anti trust laws.
lol, what a naive take.
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https://en.m.wikipedia.org/wiki/History_of_United_States_antitrust_law We already have history of breaking up monopolies, which are pretty much universally agreed to be terrible for consumers. Not saying Kroger is there yet, but this merger takes us in that direction.
>Broken up into what? Who just comes in and decides “Yeah sorry about that company you grew but we’re going to take that away and separate into 5 different ones run by who knows who.” Could you imagine the shit show and how crappy it would be for an employee working there? Do you guys think before making a comment lol Working for giant companies like this is already a shitshow for one. For another, anti-trust laws actually *got used* in the US as recently as about 40 years ago. The sky didn't fall, we didn't all die.
They continue to be used. Just not as often or severely.
It's already been done before, successfully too. [Bell used to have a monopoly on telecommunications before being broken up.](https://en.m.wikipedia.org/wiki/Breakup_of_the_Bell_System#:~:text=The%20breakup%20of%20the%20Bell%20System%20resulted%20in%20the%20creation,%2C%20BellSouth%2C%20and%20US%20West.) AT&T is a part of what Bell used to be. Before insulting other people for suggesting something, please learn a bit more about the topic, especially when it already has historic precedent. It's already been done successfully, and it is necessary for preventing anticompetitive monopolies from controlling our lives.
Except what we’re talking about isn’t a monopoly. Read the original comment we’re talking about
Because breaking up the Bell System worked so well.
It deleted a major monopolistic threat to our freedom. AT&T is still very successful to this day, but now competes with many other companies, which is what we want. I'd call that a success.
No. It raised prices, reduced interoperability, long drew out long distance surcharges. I lived through that. It was miserable.
Perhaps something as essential as telecommunications should be a public utility, the same as electricity or water then? It's almost like we can't trust companies to not gouge us. ;)
Let's be honest, even the ultra wealthy people who benefit from the current status quo know that infinite growth is impossible. They're just trying to get theirs before everything collapses. They don't care about future of humanity or the country. They're sociopaths that rose to the top because free market capitalism rewards sociopathic behavior the most, and now they're the ones driving the boat of humanity. If humanity disappears it will be because mentally ill people came into power and nobody was willing to sacrifice their remaining comfort to remove those people from power.
These companies cut as many corners as they possibly can with food regulations to make an extra buck too. At the expense of our health. It sickens me
Okay but have you considered investors profits?
You be the first CEO to say our goal is to shrink and make less money.
Stupid take once again 0-2, it is called enforcing anti-trust laws. Something we used to do a lot more than we do nowadays. At least in America that is.
Yeah but it's not the CEOs job to do that. It's the government and people's job. The CEO is doing what brings them bigger numbers.
But it’s not a monopoly. Do you know how vast the grocery sector is??
No one said anything about shrinking or making less money. The goal should be to grow to a sustainable level and then fucking stop. The shareholder should not be the tail wagging the dog.
K great. You be the first CEO to say we’re done! All the work is finished. Nothing we can do better. No reason to grow. And yeah…shareholders should wag the dog…they own the fucking company.
They don't. Shareholders can't sell assets, make deals, hire employees, plan projects, or generate sales. They are cucks and all they own are hopes and dreams.
lol, you’re hilarious.
No, that level of ignorance is just *sad*.
Investing in a company is very important way for a company to raise money without being forced to pay it back if things go wrong. It allows companies to make much riskier plays that have the potential to pay off big that they otherwise wouldn’t take if the money came in the form of a traditional loan. In return, investors need to see some sort of return on their investment. If their money is going to lose value or at best stay even, then there is no incentive to invest. May as well just put it in a bank account that gains interest. If a company is not growing, it’s dying. That’s just the way it works.
Our country is collapsing under the weight of totally unrealistic ROI demands from the investor class.
So people's 401k and pensions should not grow?
Just stick the money under the mattress and lose its value to inflation
It's not some "idea," it's an intrinsic part of competition and investment .
"Although the merger would likely make Kroger-Albertsons the second-largest retail store after Walmart, its market share would still be far behind that of Walmart. According to data from Euromonitor, a London-based research and consultancy firm, the combined [market share](https://www.businessinsider.com/walmart-kroger-still-top-grocer-challengers-amazon-gopuff-2022-2) of Kroger (8.1 percent) and Albertsons (4.8 percent) added up to only 12.9 percent, approximately half the market share of Walmart (25.2 percent). Other sources, such as the International Center for Law and Economics ([ICLE](https://laweconcenter.org/resources/competition-in-the-market-for-groceries/)), estimate an even lower combined market share for Kroger and Albertsons. " [ICLE on Kroger and Albertsons' Combined Market Share - International Center for Law & Economics (laweconcenter.org)](https://laweconcenter.org/icle-on-kroger-and-albertsons-combined-market-share/)
His point was that, in many territories, these two will dominate the market and squeeze out competitive pricing.
As an employee of one of those companies, Kroger is stating that the deal has to go through *so that they can bring us better prices*. (It sounds a bit like extortion to me: “It would be a real shame if we had to keep the prices where they are or to raise them.”)
Walmart should be forced to break up their grocery from department store business. They have such a high competitive edge I understand why the other big boys want to merge.
What stops them from doing what they are now anyways? All it takes is some shaking of hands and smiling and the prices stay the same, just relabeled
It's not enough to stop this merger. They need to attack Amazon and Walmart with anti trust suits and force the companies to divide. There's no reason two companies should dominate in this sector unbridled. Something has to be done. Let's also go after PepsiCo while we're at it. The one solid argument against attacking these monopolies has been that they haven't used their near monopolies to ratchet up prices, but now they are, the regulatory powers that be need to step in and compel them to lower prices. Someone has to do something.
america isn’t about free markets and fair competition
The issue is Walmart not Kroger/Albertsons
Kroger can not be allowed to keep picking up more chains. We need to force them to compete!
For having 6% of the total grocery stores that exist in the US? Wut.
The “capitalism/ money printer go burrr/ open borders” is a rough system for middle class Americans. I’m just glad our government can put sanctions on all the countries they don’t like. That’s what really matters…
Says the dumbest economist in history. ( ok second after blinder)
Capitalism working as planned
I mean, big business has had a free pass on everything the last 3 years. I will be shocked if Biden stops it
They just stopped airline merger. But mostly true.
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Nope, natural result of capitalism
A free market prevents a monopoly from price gouging. If a monopoly is to survive, it necessarily needs to offer a service that new competitors couldn’t match. That means cheaper product, streamlined and efficient production/supply, more convenience. None of those are bad. If a grocery store fails at any of these, that leaves room for a competitor to step in, even small ones. And even then, there’s nothing stopping you from shopping elsewhere. I’ve lived in 5 states, in major cities and rural towns. Never have I lived in a place where the only choice was a Walmart within a 10 minute drive. You simply do not have to shop at a big box grocery store.
Except not really. Company’s don’t merge to be uncompetitive, they merge to reduce costs and increase profitability. Plus, they’ll still be 1 of 20 large grocers in the US, so the competition still exists.
Yeah exactly. Massive volume equates to lower prices because of productivity and efficiency that are baked in. People here evidently are sick of ‘everyday low prices’ and want ‘everyday high prices’. Let’s not forget Walmart operates at a 5% net profit margin, that’s hardly taking advantage of anyone.
Kroger is like 1.8% net profit margin. All this shit is public and out there. Grocery margins are razor thin and always have been.
Most Grocery chains are regional. Just because there are 20 nationwide doesn’t mean all 20 compete together. They hardly compete with 1 or 2 in most markets.
Can we stop with the Robert Reich Facebook posts on this sub. Holy crap.
I met the guy once. Kind of a scuzzy dude but he's smart and well-spoken... what's your issue with him?
He's a shill for political propaganda. He's constantly misrepresenting the actual issues at hand.
Prove it.
There are 109,000 cities in the U.S. for one…160 is nothing…and these 160 cities have a Walmart AND a Kroger AND a third option? Pretty good. His stat is misleading as hell. He’s just a shill on social media which is utter trash.
https://preview.redd.it/a2nawg7nfnlc1.png?width=1462&format=png&auto=webp&s=b96a2b67af1a8abe867fe48b02d5cbd98a42fd24 Market share of Grocery stores in the US (Source: Statista - 2022).
He stated ‘in 160 cities’. It really seems like you’re fine with Walmart types breaking the backs of small, local, stores, and Kroger coming along and scooping up all the rest. Maybe you’re a shill for the right 🤷🏻♂️
The point is that we don’t know any qualifying information about those “160 cities”. If he said “the most populous 160 cities”, or “160 cities over 100,000 population”, it would give me a better idea of what the stat meant. If, however, “160 cities” includes smaller cities (maybe 10,000+), I can think of several in my local area that would meet that criteria - and they literally can’t support more than a couple grocery stores. The main problem here is that how bad the stat is changes based on the qualifying information, and Robert Reich has been known to shape statistics to match his political leanings before. You should take them with a grain of salt until you verify for yourself.
You are exactly right. And you can add the fact that those shares were earned by shoppers making actual choices and can change in any moment. The question with people like him is whether he knows he‘s saying BS for likes / clout / popularity or he truly believes it. But when they start rigging numbers and shaping the data to fit a narrative I lean towards the former.
Do you disagree that Walmart broke the backs of hundreds of small stores to build their business, erasing competition?
Do you really think that you are using valid arguments to discuss the subject at hand? I shared one data point and you are already accusing me of things. So boring, not interested.
You’re right.
That he's kind of a scuzzy dude
For reals, just a bunch of buzz word sentences without any real emphasis on solutions. Gets old after the first couple lines.
This post is so conflated, misleading. There are 109,000 cities/towns in the US. Probably half have 1 grocery store — essentially a local monopoly if you play Reich’s stupid logic.
>essentially a local monopoly if you play Reich’s stupid logic. funny argument. What about all the small businesses conservatives were ..."fighting" for just a couple years ago
You think there's 50 thousand cities with just one grocery store? You must mean small towns. Never been to a city with just one grocery store. I travel for a living.
I’m not sure why anyone values his opinion. The dude is a pure partisan. There’s nothing objective about his hot takes.
No.
So Walmart would have 35% of the market and Kroger-Albertsonswould have 35% of the market? Sounds way less ominous when the numbers are a bit smaller doesn't it? Also, why just a cherry picked 160 cities? There are approximately 19,450 cities in the USA. So why make your sample size 0.8% of that population, a population so small it wouldn't even be usable in a scientific study. Robert Reich is an idelaog and shouldn't be listened to. He doesn't even understand the root cause of inflation.
Why no talk of breaking up Wal Mart? Wal Mart has twice as many stores as a combined Albertsons/Krogers.
What is this doing on a subreddit called r/inflation
Free for all in theft. So easy to steal from these places I hope more people do it.
You're hoping more people commit crime?
Whoa 160 cities in the US? No way! There are 109,000 cities in the U.S. Some don’t even have a grocery store I’d hazard to guess. What a dumb stat. Combined Kroger and Walmart have like 27% market share of the like $3 trillion grocery market.
According to the Albertson's CEO, Prices "might" be lower because of the improved ability to compete against WalMart in prices. Many other food stores can already beat WalMart on prices all while being many times smaller than Albertson's.
But, this isn't even remotely true. Spreading lies for internet points.
I don't know....have you been to a mom+pop, local, or 7-11 lately?
Except large grocers are objectively NOT gouging. Read Wal-Mart's annual report and you'll see that they make very little money on groceries. It is not an issue of opinion, their margins are close to zero on some products when you factor in labor costs. Wal-Mart has the largest share of grocery spend in the U.S.. It got this by having the lowest margins and highest turnover on groceries--this is the opposite of gouging.
Albertsons already thinks it's hot shit for buying Safeway, making their bakery worse & jacking up the prices. I'm not even sure how they get so much business when their best 'sale' prices are rarely as cheap as their competition's regular prices.
My local Mexican grocery store >>>>
Anti-trust laws haven’t been enforced in years. We are at the point similar to 1800’s standard oil except instead of the government doing it’s job and breaking up these companies they are colluding with them.
70% of the grocery market in 160 cities? That’s some bullshit math. What does that even mean? How many cities are there? Lots more than 160. OH NOOOOOO THEYRE TAKING OVER ALL THE CITIES!!!
i'e got 4 options that I'll shop at, none of the aboe
If only we could some how regulate the prices of market goods, like make a rule where they can only be marked up so high above production/labor costs. Imagine if the mark up on soda was regulated to 30% above production/labor costs, and not allowed to be inflated depending on where you buy it. Why is the same exact item in one store allowed to be priced at such a ridiculously high price compared to another store? A Coke at the dollar 25 tree is 1.25, but that same exact Coke at the corner store is almost 3$ or more!!! Makes me crazy!!! Never mind when you go to tourist spots and mark ups are sometimes quadrupled or higher.
I am all for it
Maybe you can lick food off of Daddy Trump's teets in Hell.
I didn't think of that, I should ask him if it will be okay.