The two largest supermarket chain owners in the United States have been sued by the Federal Trade Commission over their proposed merger, which would drive grocery prices even higher, by reducing competition across the entire country. Only the federal government has the power to protect consumers against abuse by this type of giant interstate monopoly.
The largest grocery company in the country is Kroger, which owns at least 17 store chains, comprising more than 2,700 stores, including the entire New York/New England Market Basket and Hannaford chains. Kroger’s manufacturing facilities put different store-brand labels on basically identical goods, packaged for different chains it owns. However, this only simulates the appearance of competition between stores.
Every store gets, say, the same elbow macaroni, packaged in different boxes. Kroger collects $150 billion in revenue each year, from people like you and me.
The second-largest grocery owner in the USA is Albertsons, whose chains operate about 2,500 supermarkets, including all the Shaw’s and Star Markets in the northeast, as well as Safeway in the south and west. Albertsons’s annual revenue is $72 billion.
You may ask, why worry about two grocery companies merging? Shouldn’t we just let free enterprise be and let them merge into one even bigger company? It’s also worth asking, how can Kroger even afford to buy a huge company that is more than half their own net worth?
Well, there’s more to Kroger than meets the eye. Kroger is held by trillion-dollar investment house Berkshire-Hathaway, led by billionaire Warren Buffet (who famously claimed to pay fewer dollars in taxes than his secretary!).
It is only a small exaggeration to say that the Berkshire-Hathaway holding company owns a piece of everything, from homes and home furnishings (thousands of rental properties, and Jordan’s Furniture stores) to retailers (Amazon), real estate, and car insurance (GEICO), banking (Bank of America & American Express), food (Kroger, Coca-Cola, Heinz, and Dairy Queen), manufacturing (Mitsubishi & Fruit of the Loom), news media (Gannet mass media, which owns USA Today and 68 TV stations, as well as Lee Publishing, which runs 77 daily newspapers and 350 magazines), energy (Chevron and Phillips petroleum), and several building materials industries (Benjamin Moore and Johns Mansville). The list goes on and on.
These two dominant grocery conglomerates are already so large that they can manipulate the cost and price of every grocery item you buy, even those sold by their smaller competitors, Walmart, Costco, and Whole Foods. They collected $2,500 on average from every household in the nation last year. They’ll own more than 5,000 supermarkets across the country, if the merger is allowed to go through.
Their power to set prices on staples such as eggs, meat, produce, and dairy will be even greater than it is today. You may switch to the supermarket down the street, but chances are, they own that one too.
A study this year by the USDA says that the average American spent more than 11 percent of their after-tax income on food, an amount that grew nearly 13 percent in 2023. Housing is another expense that has exploded in the past few years, devouring around half of most New England renters’ income.
Food and housing are a major part of what economists track in the Consumer Price Index (CPI), with fuel and energy making up another big part. All of these sectors (housing, food, and energy) are rapidly trending toward monopoly. I don’t need to tell you that the CPI has been rocketing up because of this; we all have felt it!
A technical point must be made: these price increases are not “inflation”; they are “greedflation.” Inflation stands now at a tolerable 2.5 percent. That’s nothing like the 13 percent grocery jump mentioned above. Strictly speaking, economists define inflation as a falling value of the dollar, which also makes price tags go up, but for a different reason than the “greedflation” we are seeing now.
Inflation’s related to the dollar’s weakness against other global currencies and controlled by interest rates paid by big banks taking loans from the Federal Reserve (essentially, the US Treasury). The Fed’s primary job is to safeguard the value of the dollar, but it can also stimulate investment and economic growth by lowering interest rates to make money “cheaper” to borrow.
I think the Fed has done its job very well: the stock market is stronger than it’s ever been, inflation is low, the US economy remains the strongest in the world. Wealthy investors are happy that large interest and dividends payments are trickling down to them as a result. But none of this helps working families make ends meet, when prices are rising much faster than their wages.
The reason we are seeing increasing CPI prices is not because the federal government is making the dollar worth less. It is because nobody is stopping a small number of giant monopolistic industries in food, housing, fuel, and energy from merging, controlling the global supply chain, and pushing smaller players out of the wholesale market. They can charge the stores or gas station chains they own whatever they want, and we consumers have few alternatives but to swallow hard and pay up.
The solution is for you to elect lawmakers who will do the hard work of updating our century-old antitrust laws (which, unfortunately, only regulate business monopolies selling directly to retail consumers, not chain wholesalers). Today, anti-competitive monopolistic wholesalers only supply the retail stores they own themselves, technically not consumers, so antiquated antitrust laws are not written to rein in their activity.
Rising prices are not “inflation” caused by government mismanagement, they’re “greedflation” caused by huge monopolies who need to be broken up. As a voter, listen to candidates describe their position on this issue, and see if they understand how to fix it as well as you do!