Blaming Greedflation for High Food Prices Is Misguided
Markups in grocery stores appear to be persistently higher than before the pandemic. But don’t rush to the conclusion that market power is the only explanation.
Prices really are high.
Photographer: Ian Waldie/Getty Images
Vice President Kamala Harris’ recent proposal to ban price gouging in the grocery industry has raised tricky questions about the recent history of grocery prices, inflation and market power. Markups in grocery stores appear to be persistently higher than before the pandemic. But don’t rush to the conclusion that market power is the only explanation here.
Let’s start with the basics. Grocery prices rose 23.5% between the end of 2019 and the start of 2024, compared with an increase of 18% for all other prices. The mere fact that grocery inflation outpaced everything else is not, by itself, evidence of unscrupulous pricing behavior. If it were, then by definition half of inflation every month would always be the result of price gouging!