The Real Reason Your Grocery Bill Is Still So High
Americans have had to weather much in the years since the COVID-19 pandemic first began, including price inflation of basic necessities.
Grocery bills, especially, are a drain on household finances. But, as recent reports show, inflation is easing across many industries, and yet food prices overall have remained stubbornly high.
Not only
is that an indication of a deep rot at the heart of the food industry,
agribusinesses, and corporate grocery chains, but it is also a clear sign that
we need to repair our entire food system.
Reporting on a new Census Bureau survey, USA Today’s Sara Chernikoff found that “[t]he average American household spends more than $1,000 per month on groceries.”
And, while it’s not surprising that those residing in expensive
states like California have high grocery bills, there’s little relief for those
living in states with lower costs of living. An average California family’s
weekly grocery bill is $297.72, but an average North Carolina family’s bill is
$266.23—nearly as high.
Attempting to downplay this reality, Paul Donovan, chief economist of UBS Global Wealth Management, wrote in an op-ed in the New York Times that Americans might be overestimating how serious inflation is, feeling the pinch most especially when they buy something as small as a candy bar.
“[C]onsumers
perceive inflation as higher than it actually is,” wrote Donovan. Further, he
claimed, “[h]umans are genetically programmed to emphasize bad news over good
news when they make decisions.” Donovan is implying that we’re just imagining
high grocery bills.
In fact, inflation in the grocery industry has been higher than in other industries, rising 25 percent over the past four years compared to 19 percent overall, and many have pointed to simple greed as the reason: food prices are high because the companies setting prices think they can get away with padding their profits.
Since we all have to eat, naturally this hits lower-income families harder, rather like a regressive tax. A new report by the Groundwork Collaborative found that in 2022, “consumers in the bottom quintile of the income spectrum spent 25 percent of their income on groceries, while those in the highest quintile spent under 3.5 percent.”
Economists have attempted to explain
the reasons for grocery-related inflation remaining stubbornly high by pointing
fingers at supply chain issues, higher labor costs, and agricultural pests.
The Washington Post even admitted—albeit
with little additional comment—that “consolidation in the industry gives large
chains the ability to keep prices high.” (I’ll return to this critical point
below.)
Fearing that voters feeling the
pinch every time they shop for food will punish him at the ballot box,
President Joe Biden has taken aim at the food industry. At an event in South
Carolina on January 27, 2024, the president remarked that, while “inflation is
coming down… there are still too many corporations in America ripping people
off: price gouging, junk fees, greedflation, shrinkflation.”
To be fair, some foods did become cheaper, such as eggs. Remember the nationwide scramble on eggs in the early months of the pandemic with many grocery retailers limiting the number of cartons per customer?
But in the years since, prices leveled off. And then they whisked up again. In fact, eggs are a far
better indicator of why Americans are upset about food-related inflation than a
Snickers bar.
There are plenty of short-term interventions that government can apply to help American families cope with the high cost of groceries, and President Biden has implemented many of them.
Groundwork Collaborative’s report cites an increase in
Supplemental Nutrition Assistance Program (SNAP) benefits for the lowest-income
Americans, as well as the federal government’s initiative in taking food
corporations to court over price gouging, and helping to lower the prices of
crop fertilizers.
But many of these fixes are workarounds to compensate for the massive monopolistic corporatization of our food industry. Recall the point that the Washington Post made with little additional analysis: “consolidation in the industry gives large chains the ability to keep prices high.”
The fact is that only a handful of corporations control the
majority of our food system. We are all at the mercy of a small number of big
companies. And, unless we make serious systemic changes to our food systems, we
will remain so.
When thinking about longer-term fixes that free our foods from corporate profiteering, the humble egg is once more a good example. When eggs were prized items during the early months of the pandemic, small producers and farmers markets became the only reliable suppliers for many Americans.
I recall being even more grateful than
usual for my membership with the Urban
Homestead, a small farm in the heart of Pasadena, California, where
I live. Each week, I place an order with them for fresh produce and other
locally grown foods to supplement my store-bought groceries. During the
COVID-19 lockdowns, Urban Homestead was one of the few sources my family had
for eggs and fresh produce.
But such small producers are few and far between. While the lucky ones among us may have access to urban farms, there are simply not enough small-scale growers to feed most Americans.
Those farms that do exist operate on razor-thin margins, struggling year after year to remain financially viable. They remain on the outskirts of a massive capitalist playing field that is tilted toward profit-centered, highly subsidized agribusinesses and grocery chains.
While small farmers, both urban and rural, are
struggling, food trading companies are gobbling up massive profits. And the
federal government’s farm subsidy program disproportionately
benefits large corporate growers rather than the family farmers they are
ostensibly aimed at.
Localizing our food supplies and shortening the chain between food buyers (i.e., all of us) and grocery suppliers ought to be the focus of food-centered government policies.
This requires adopting a mindset based on the idea of “food justice,” a topic on which much has been written.
We need to make it
easier for small-scale farmers to grow food while remaining financially stable,
and harder for large-scale corporate agribusinesses to control our food supply.
This requires incentivizing small-scale farmers to remain small and
sustainable—the opposite of the “growth” ideals of corporate profiteers.
Lawmakers and corporate media
outlets are so attached to the idea that food producers and distributors
deserve massive profits in exchange for controlling our food supply, that a
justice-based approach of de-growth rarely enters their discourse. Rather than
the rich eating us (and our wallets), it’s time for us to eat the rich.
This article was produced by Economy for All, a project of the
Independent Media Institute.
Sonali Kolhatkar is the
founder, host and executive producer of “Rising Up With Sonali,” a television
and radio show that airs on Free Speech TV (Dish Network, DirecTV, Roku) and
Pacifica stations KPFK, KPFA, and affiliates.