Nortaneous wrote: ↑Thu Nov 27, 2025 8:39 pm
Can retail and supermarket chains afford to be greedy? Maybe if they're the only place to buy food within a reasonable range for their customer base, but 80% of Americans live in urban areas. If Safeway charges too much for rice, I can go to Giant, or to the Chinese supermarket, or the Korean one, or the Indian one. Grocery store profit margins are typically very low: 1%, one cent of profit per dollar of product sold, isn't abnormal. If they tried to raise their profit margins by raising costs, people would shop elsewhere - who has brand loyalty to Safeway or Tesco or whoever? The
consumers want lower prices. A dollar you spend on rice is a dollar you can't spend on something else.
The weird inscrutable Latinate technocrat priesthood that runs society has not done a very good job of explaining how it works to the uninitiated. This is a legitimate problem, especially in a democracy. But part of the job of a public-facing institution is to bear public backlash to visible problems, whether or not they caused them.
None of this is arcane knowledge -- that's the standard explanation being offered. Over here we have a very media-savvy head of a retail chain; you can hear him state exactly what you explain here on the morning news.
There's obviously something wrong with that story though. The 1% profit is technically true; yet it doesn't make sense. Why would anyone go to the trouble of running a supermarket? Why do the Waltons even bother? You could get better performance out of pretty much any other investment.
So of course the money is made in other ways... One I'm aware of is that stores don't buy directly from producers (it happens, but it's marginal) -- they buy from a group purchasing office, which negotiates with producers, with a margin of course.
Most chains are franchises; it's worth looking into how the store owner pays for that; it's probably also worth looking into who owns the real estate, if stores pay rent, and if they buy, how they fund it.
Anyway... Of course the profit margin is a lot more than 1%.
As for competition, well, we could quibble on some details, but as far as I know what you say is correct. A very interesting example of the market coming with a solution that turns out to cause serious issues further down the line. In that case, pressure to push the price down causing severe economic consequences on key actors, plus of course the environmental damage.
Maybe there are issues of sticky prices in the wake of shortages. If there's an outbreak of chicken flu, eggs become scarcer and prices rise; once egg production returns to normal, customer-facing egg prices could take a while to fall. Ideally this would be studied. Maybe it has been. The grocery chains definitely know each other's prices, but equally definitely wouldn't publish any research they have. (Maybe this is a case for Mamdani's government-run grocery stores?)
True. Your example is also interesting:
we have food shortages. This points out to fundamental issues: efficient systems that bring prosperity to all should not create food shortages! And as for the causes -- the severity of asian flu is a direct product of industrial farming.
I take it as a pretty bad sign. I don't remember any shortages in developed countries until recently.
Nortaneous wrote: ↑Thu Nov 27, 2025 8:39 pm
People choose where to live.
rotting bones wrote: ↑Thu Nov 27, 2025 9:06 pm
Rich people choose where to live. The only thing I've ever chosen is the flavor of ice cream I want and things like that.
I think you're both halfway right. I'd say you begin to have a decent selection of places to live in with a middle-class income; being white also helps. That probably explains a lot in terms of vote and geographical patterns.
rotting bones wrote: ↑Fri Nov 28, 2025 12:26 am
The purpose of this proposal is to free the poor from dependence on the capitalists in various ways: capitalists can't stop creating jobs because line not go up, capitalists can't stop selling essential goods because line not go up, capitalists can't move capital abroad because line not go up, etc.
We could quibble all day long on the specifics, but I think we basically agree.