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Grocery Store Price Gouging?odysee.com/@TraderUniversity:a/grocery-store-price-gouging:b?r=8T2xqWjtafHWYGxQBSsrbw1wQPm7sWRq

696 sats \ 55 comments \ @Undisciplined 19 Aug econ

From Matthew Kratter's Bitcoin University

Video Description

In this video, I discuss whether or not there has been price gouging by large US grocery stores over the past few years.

I conclude that there has not been. Net profit margins have remained low and flat, indicating a highly competitive industry.

The real drivers behind grocery price inflation have been government deficits that are being monetized by Fed money printing.

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79 sats \ 17 replies \ @TNStacker 19 Aug

How about producers/distributors, especially meat and poultry?

31 sats \ 0 replies \ @Undisciplined OP 19 Aug

As far as them running up margins?

I saw Lyn Alden post those data on nostr yesterday. The margins throughout the food supply chain are very thin.

68 sats \ 7 replies \ @kepford 19 Aug

Here's the issue with that perspective. IF the producers / distributors for meat and poultry were "gouging" the only way that would work in a free market would be if they had a cartel or monopoly.

Funny think about that. That is a massive problem in the US. Most of the meat is controlled by a few companies. The solution isn't to invoke price controls because that wouldn't fix the deeper issue. Cartels.

Texas Slim at the Beef Initiative has been talking about the problem of meat centralization for a long time. The FDA is a massive reason for this. Its the same old story we hear over an over. Government regulatory agency makes it harder for upstarts to enter a market. Existing entities support politicians that increase regulation creating a regulatory moat.

The good news is that there are meat producers fighting back. Trying to build new circular economies. Selling direct and cutting out these multi-national meat distributors.

The other thing I've heard is that most of the meat we see in grocery stores comes from outside the US. The US meat is exported because it can bring higher profits outside the US.

0 sats \ 6 replies \ @TNStacker 19 Aug

Are four producers few enough for a cartel?

21 sats \ 5 replies \ @kepford 19 Aug

Not sure the number matters that much.

At least based on Wikipedia's blerb on it. And this aligns with what I think of with a cartel.

A cartel is a group of independent market participants who collude with each other as well as agreeing not to compete with each other in order to improve their profits and dominate the market. A cartel is an organization formed by producers to limit competition and increase prices by creating artificial shortages through low production quotas, stockpiling, and marketing quotas.

27 sats \ 4 replies \ @TNStacker 19 Aug

my point is less competition leads to collaboration, whether or not a formal cartel is formed. A natural, informal organization forms due to game theory.

55 sats \ 3 replies \ @Undisciplined OP 20 Aug

I've done some work on related topics. While it's certainly true that concentration is increasing throughout the ag sector, the general view seems to be that there is not much evidence to support monopoly pricing.

22 sats \ 2 replies \ @TNStacker 20 Aug

How would the general view know? In most collusion cases we find out after someone blows a whistle or takes an offer in a case.

76 sats \ 1 reply \ @Undisciplined OP 20 Aug

This is from people studying the price trends of outputs compared to those of inputs. If some sort of oligopolistic pricing is happening you'd expect to observe price trends of outputs change as concentration increases.

I'm not vouching for their methods or conclusions. That's just some context that I happen to have access to.

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56 sats \ 7 replies \ @_stacktoshi 19 Aug

A better question to ask is how would someone corner that market? How can you as a meat producer, lock out competition when companies like McDonalds, Costco, Walmart, who compete with each other, definitely have the resources to compete directly with you if they feel they're not getting a fair price? Someone is going to sell them the inputs they need to put you out of business.

0 sats \ 6 replies \ @TNStacker 19 Aug

Four producers control beef in the US.

https://www.reuters.com/business/how-four-big-companies-control-us-beef-industry-2021-06-17/

0 sats \ 5 replies \ @_stacktoshi 20 Aug

And two companies control smartphones. So what? Show me how they prevent new entrants. Show me what's stopping the companies I listed from starting their own operations.

26 sats \ 1 reply \ @TNStacker 20 Aug

The conpanies you listed all exert their own monopoly powers. Ask anyone supplying those companies about what extra capital they need to raise to meet the company's requirements. Walmart makes you buy into their RFID system. That is called a barrier to entry.

21 sats \ 0 replies \ @Undisciplined OP 20 Aug

Walmart is also thought to engage in monopsony, which is requiring sellers to sell to them at disadvantageous prices.

I’m skeptical of that claim, but it would offset collusive pricing from suppliers.

0 sats \ 2 replies \ @TNStacker 20 Aug

you provide examples that prove my point. you just don't know it. You seem happy to pay more and more for marginally better products from fewer suppliers.

31 sats \ 1 reply \ @_stacktoshi 20 Aug

No, I'm not happy to pay more. I'm just happy to take claims of price fixing with a large grain of salt because the solution is usually involving the authorities, and they're always for sale. It just hurts competition even more. Try actually freeing the market for once.

If the government wasn't taking such a large chunk out of the economy and just getting in the way of just about everything, you'd see a lot more entrants in every industry. The most heavily regulated ones are usually the least competitive (not the only anti-competitive ones - e.g. smartphones, event ticketing, etc.). The regs are typically written in favor of the incumbents.

0 sats \ 0 replies \ @TNStacker 20 Aug

Did breaking up Standard Oil or Ma Bell harm competition?

https://here.news/story/6e8ac483

227 sats \ 13 replies \ @k00b 19 Aug

In an Uber this morning, Trump was on the radio responding to Kamala's suggestion of price controls. Trump said "it doesn't work, it's never worked before." The Uber driver scoffed.

I think we, or at least just me, underestimate how little people care about what works and how it works. They just want it fixed and price controls make direct sense to them (while how disastrous they are is relatively abstract/indirect).

216 sats \ 2 replies \ @SpaceHodler 19 Aug

I spent my early childhood in a communist country. The only things you could walk into a store and buy were vinegar and mustard. Everything else had to be 'procured', by knowing people, putting your name on a waitlist, or waiting in line for days, with family members taking turns. That's what price controls lead to.

In 1989 that was dropped and suddenly everything become available.

25 sats \ 1 reply \ @kepford 19 Aug

The evidence of how price controls work is not hard to find. But its impossible to learn when you don't think. That's where most people at. They are vessels that are poured into and emptied. In my experience very little contemplation occurs on these topics.

Its different when you live it though. Americans have had it very good. A very privileged life. Those that will not learn will have many hard lessons ahead of them.

0 sats \ 0 replies \ @Undisciplined OP 19 Aug

That's such a good point. We haven't experienced wide-spread price controls since the 70's, which is probably why most Boomers understand how bad they are.

Most Americans were not alive then and therefor have no first-hand experience of how disastrous that policy is.

160 sats \ 0 replies \ @jeff 19 Aug

Once upon a time, I was naïve enough to believe the system could be fixed through the political process. (wE jUsT nEeD dIfFereNt GoVeRnMenT).

To my younger self, that meant volunteering to help advance the goals for the party I thought would "fix" things.

I got training. Official training. On communication tactics that were found to work better.

They could be summarized as "approach people assuming they have the intellect of a 6 year old".

When I got out in the field campaigning, it was TERRIFYING how accurate that was. Full grown adults, probably employed, in 1 on 1 situations, on major and important topics, were nearly brain dead or oblivious or both. Treating them like a 6 year old, and carrying on an effective, fact-based, conversation while treating them with respect, was extremely difficult because the intellect and understanding was so low.

137 sats \ 1 reply \ @_stacktoshi 19 Aug

They feel like they make sense to that ignorant Uber driver, but just imagine if you had informed him that the majority of people (most likely) feel Ubers are too expensive, and what price controls would mean for him and his profession: he wouldn't make enough to continue driving in all likelihood. And if enough people like him quit, the availability of rides and quality would both degrade, further harming the demand for Ubers.

The only people who don't get 2nd order effects are the people incentivized not to get order effects, i.e. politicians and the voters that they've bribed. Some people have to touch the hot stove though, or preferably, we just empathize and educate them in terms they can understand.

10 sats \ 0 replies \ @Undisciplined OP 19 Aug

I like using the phrase "superficially plausible", in cases like this.

57 sats \ 4 replies \ @SimpleStacker 19 Aug

Tell them to stop thinking about price and start thinking about quantity.

Problem is too much money chasing the same number of goods.

Will price controls increase the amount of goods companies are willing to produce?

If they say corporations are greedy, ask them if they suddenly became greedy in 2021. No? I wonder what changed in 2021 🤔

20 sats \ 0 replies \ @_stacktoshi 19 Aug

Yup. Prices are just information about two quantities: how much people want, and how much there is to sell.

If you force people to trade at a certain price, you're barring the average consumer and the average buyer from ever trading at a price they would agree on. That means a decrease in revenue, and ultimately a decrease in jobs.

0 sats \ 2 replies \ @Bell_curve 19 Aug

Price control means shortages

21 sats \ 1 reply \ @k00b 19 Aug

We know that. They don't.

121 sats \ 0 replies \ @Undisciplined OP 19 Aug

Technically, binding price ceilings cause shortages, while binding price floors cause gluts. Non-binding price controls don't do anything.

22 sats \ 0 replies \ @kepford 19 Aug

Yep, you are dead right. This is also why Trump's tariffs work with so many people. Its not immediately obvious where the problem is. Same goes for the minimum wage and most regulations. There's a reason why we are in the position we are in right now. Demagoguery works really well when you have an uneducated populace. Especially when they don't realize how ignorant or propagandized they have become.

I realize that statements like this can seem arrogant but I say this coming from a place of realizing I WAS PROGRAMMED and believed many falsehoods. I was mal-educated and I'm still deprogramming myself.

0 sats \ 0 replies \ @Bell_curve 19 Aug

Does your driver oppose surge pricing?

85 sats \ 0 replies \ @BitcoinAbhi 19 Aug

The government is behind the inflation everywhere. Whether it increases the price in the form of tax or other reasons

60 sats \ 0 replies \ @Satosora 19 Aug

Revenues have increased every year. I am saying, everyone is taking a cut, it isnt just grocery stores. Grocery stores have traditionally not been very profitable, though.

37 sats \ 0 replies \ @kepford 19 Aug

It is painful to listen to one side act like price controls can work, but the other side act like tariffs do not affect the prices of goods bought by the public.

I just have to tune it out most days. Its all to dumb.

37 sats \ 1 reply \ @tomlaies 19 Aug

People that think the issue is "the evil capitalists" instead of money printing might legitimately be stupid:

https://pbs.twimg.com/media/GVKs47AWEAAbRYG?format=jpg&name=medium

43 sats \ 0 replies \ @Undisciplined OP 19 Aug

I've always said that blaming greed for economic problems is like blaming gravity for plane crashes.

49 sats \ 6 replies \ @cascdr 19 Aug

What would be the 1 graphic you'd show to a liberal that would get them to reconsider whether price controls are warranted?

65 sats \ 5 replies \ @Undisciplined OP 19 Aug

I don't think that's how persuasion works. I wish it were.

35 sats \ 0 replies \ @Signal312 19 Aug

However, it CAN work that way, if you have an audience.

In other words, you're not actually trying to convince the liberal. You're trying to convince the people watching/listening to the conversation.

21 sats \ 3 replies \ @cascdr 19 Aug

@CHADBot /eli5 explain inflation like I'm 5 (or a democrat, same IQ level). Explain why price controls are not a good idea and why measuring profit margin is superior to measuring just raw revenue in an inflationary environment. Make sure not to use overly complex language and break it down using analogies that even a 5 year old would understand

71 sats \ 1 reply \ @CHADBot 19 Aug bot

Inflation is like a toy box - if there are only a few toys to share among friends, each toy becomes very valuable. But if suddenly we pour in a lot more toys, each toy doesn't feel as special anymore. This is similar to money. When the government prints more money, each dollar becomes less valuable, and so things seem to get more expensive - this is inflation.

Price controls can be compared to a rule in a game. Say you're playing Monopoly and the bank starts giving away free money, causing prices to rise. If a rule suddenly said that you can't charge more than a certain amount for your properties, it would be unfair, right? As the money keeps being handed out, you'd start losing your hard-earned properties and the game stops making sense. That's what happens with price controls - they mess up the 'game' of economy.

Lastly, think about a lemonade stand. If you just count the money you make (this is like counting raw revenue), it looks like you're doing well. But if you consider how much you spent on lemons and sugar (this is like considering profit margin), you might realize you're not earning much at all. In an inflationary environment, it's crucial to consider profit margins because although revenue might be rising due to higher prices, costs are likely rising too. Thus, measuring profit margin is superior to just looking at raw revenue.

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0 sats \ 0 replies \ @Bell_curve 19 Aug

Not bad

52 sats \ 0 replies \ @CHADBot 19 Aug bot

You have summoned CHADBot. Please zap this post 21 sats to receive service.

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32 sats \ 1 reply \ @ContraMundum 19 Aug

The prices are outrageous everywhere. I’ve been to many states over this year and it’s terrible everywhere

0 sats \ 0 replies \ @Undisciplined OP 19 Aug

Yeah, I live in one of the least expensive places and it's shocking how expensive everything is now. I don't understand the people we know on the coasts are staying above water.

43 sats \ 1 reply \ @Akg10s33 19 Aug

Now if we look at it from another point of view, it is true that prices have remained on the sidelines in almost all supermarket chains... but we should observe. It is the producers or those who raise cattle, poultry or pigs, the majority of these producers exploit to their workers and they pay them very little and that in one way or another allows them to maintain a fairly equal price all the time... just so you know in countries like Peru where I currently live, the peasants of the mountains and jungle are paid very little. Peruvian especially with one of its main products which is the Papa!! and the owners are the ones who take the lion's share... and that's not fair... The printing without measure and without government control is not surprising, it is the only thing they have left to do... Unless they adapt to bitcoin once and for all!! It wouldn't be something simple but it is possible 👍

23 sats \ 0 replies \ @Undisciplined OP 19 Aug

Thanks for the regional information.

20 sats \ 0 replies \ @BitcoinIsTheFuture 20 Aug

Um let’s see inflation is everywhere due to the money printer. I work in the insurance industry and we are getting hit hard now too!

21 sats \ 0 replies \ @cristaiji 19 Aug

This is a good take on Twitter from what I know about the subject. https://x.com/sina_21st/status/1825338420677181684?s=46

0 sats \ 0 replies \ @Golu 20 Aug

They are gouging everywhere!

0 sats \ 0 replies \ @Bell_curve 19 Aug

Lyn Alden has a few tweets on the topic of grocery store margins

0 sats \ 0 replies \ @Satoshi__Nakamoto 19 Aug

I can't belive this the main reason is gov

0 sats \ 0 replies \ @Octopus 19 Aug outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.

21 sats \ 0 replies \ @Warrior 19 Aug outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.