https://www.thefp.com/p/why-are-grocery-bills-so-high
At the presidential debate, Vice President Kamala Harris told the American public she has “a plan” to alleviate America’s housing shortage, help small businesses, and “address the price of groceries.” That plan, like the rest of her policies, is elusive, but in a recently released “issues page” on her campaign site, she listed cracking down on “on anti-competitive practices” as a top priority. On the campaign trail she has promised that, if elected, she’ll call for “the first-ever federal ban on corporate price gouging on food and groceries” within her first hundred days in office.
With that line of attack, Harris has certainly tapped into a vein of voter anger: Lots of Americans are upset about their grocery bills, which rose dramatically during the inflation that followed the pandemic and have never come back down. Food prices increased by 11 percent in 2022, professor Ricky Volpe, of Cal Poly’s Agribusiness Department, told The Free Press. And while they’re only projected to rise 0.7 percent in 2025, those 2022 grocery prices have stuck. Americans still notice when they pay $5.24 for a pound of ground beef that cost only $3.80 a few years ago.
Unsurprisingly, a survey conducted by the Food Industry Association last month found that 69 percent of Americans feel their income hasn’t kept up with food inflation. That group includes significant percentages of older consumers (Boomers and Gen X) as well as people at the low end of the income scale.
But it’s worth asking: Why have food prices gone up so much? And does price gouging—the practice of jacking up prices during a natural disaster or other short-term emergency—really have anything to do with it? Volpe told me that, in fact, if food prices are rising beyond what consumers feel is reasonable, the food companies themselves play a surprisingly small role in the price hikes. Grocery stores, for instance—even giant superstores—are intensely competitive. Grocery store profit margins are among the lowest in all of American business, often as low as 1 percent.
According to Volpe, the rising costs of labor, shipping, and packaging have increased more than food prices since the onset of the pandemic and have played a more significant role. Matt Lind, 31, owns a food distribution company, Farmlind Produce, that purchases fresh fruits and vegetables from farms nationwide and trucks them to grocery stores and restaurants on the East Coast. “Post-Covid,” he told me, “freight out of California was around $6,000 this time of year. Last week, I paid as much as $8,400.”
