Don't Blame Supermarkets for Your Expensive Groceries

What it means here:Here, "scant evidence" means there is barely any proof that supermarkets are pocketing unusually big profits — hardly enough to point to at all.

In general:Scant means very little; barely enough; far less than you'd want or expect.

What it means here:To "gouge consumers" here means to overcharge them — to use a dominant position in the market to squeeze extra money out of shoppers who have nowhere else to go.

In general:To gouge someone is to charge an unfairly high price by exploiting a situation or a position of power (often called "price gouging"). Taken literally, to gouge also means to dig or scoop something out.

What it means here:In the article, opportunism means grabbing the chance to raise prices further than costs required — cashing in on the confusion of inflation to pad profits.

In general:Opportunism is taking advantage of a situation to benefit yourself, especially in a way that ignores fairness or principle. An opportunist grabs whatever chance comes along, even when it's a little unfair.

Imagine a lemonade stand. You sell a cup for $1, but the lemons, sugar, and cup cost you 97 cents. You keep 3 cents. That 3 cents out of every dollar is your profit margin — the slice of each sale a business actually gets to keep after paying its costs.

A margin is not the same as total profit. A business with a tiny margin can still make a lot of money if it sells an enormous amount (three cents each, but on millions of cups). But the margin tells you how much room there is inside the price — whether a business is quietly getting rich on each sale, or barely scraping by.

That is the hinge of this whole article. Supermarkets like Kroger keep only about 1 cent of profit on each dollar of groceries; Walmart, about 4. That's razor-thin — they can't be the ones gouging you, because they're hardly keeping anything. Meanwhile the companies that make the branded food on the shelves — General Mills, PepsiCo, Kraft Heinz — keep around 13 cents on the dollar. The same box of cereal earns its maker far more than the store that rings it up.

Think about your favorite pizza place. If the price of flour, cheese, and the gas for deliveries all jump at once, the shop has to raise the price of a slice just to break even. It isn't being greedy — it literally costs more to make the pizza than it did last year.

That's cost-push inflation. "Inflation" just means prices rising in general; "cost-push" tells you where the push is coming from — the rising cost of the ingredients and effort behind a product (raw materials, fuel, wages). When those inputs get more expensive, businesses pass the extra cost down the line until it lands on the price tag you pay. (Contrast that with the "greedflation" story, where the rise is blamed on sellers simply deciding to charge more.)

It's the article's answer to "so why did groceries actually get so expensive?" Fertiliser and fuel prices surged — first from the war in Ukraine, then conflict with Iran — and farm wages rose after governments cut immigration. Food cost more to grow and move long before it ever reached a shelf. The rise wasn't the store deciding to be greedy; it was costs climbing at the very start of the chain.

Follow a chocolate bar backwards. A cocoa farmer grows the beans, a factory turns them into chocolate, a famous brand puts its name on the wrapper, and a shop sells it to you. Every one of them "touches" the bar — but they do not split the money evenly.

The profit tends to pile up wherever a link has something others can't easily copy: a brand people specifically ask for, a secret recipe, a patent. Links that are easily swapped out — a store is a store, one cocoa farm is much like another — have to compete on price, so they keep almost nothing. Economists sometimes call the fat part of the profit "the cream," and it usually sits at just one or two links in the chain.

In groceries, the supermarket that rings up your cereal keeps only about a penny per dollar, while the company whose brand is on the box keeps around 13 cents — the value is captured by the name on the front, not the shop on the corner. You see the same pattern everywhere: Apple keeps far more of an iPhone's price than the factories that assemble it, and a streaming app and a hit musician divide the same song's earnings very unevenly.