Elizabeth Warren is attacking the grocery sector for being too consolidated:
What happens when only a handful of giant grocery store chains like @Kroger dominate an industry? They can force high food prices onto Americans while raking in record profits. We need to strengthen our antitrust laws to break up giant corporations and lower prices. pic.twitter.com/DMa9Z7adFr
— Elizabeth Warren (@SenWarren) January 7, 2022
Here are the market shares of the biggest players in the industry as of 2019:
A 16 percent market share is not exactly world domination. The report those data are from, by industry-research firm IBISWorld, also notes that competition in the grocery sector is high and likely to increase in the future. It notes that grocery stores have to undercut each other on price because the goods they sell are mostly the same from store to store. A can of Campbell’s soup is a can of Campbell’s soup no matter where you buy it. Grocery stores compete by offering deals on name brands or by providing cheaper generic-brand products; either way, it pushes prices down.
Just looking at grocery-sector market share to determine competitiveness is incomplete. Each company on that graph also competes with big-box stores (such as Walmart/Sam’s Club, Costco, BJ’s, Target), convenience stores (such as 7-Eleven, Circle K, Kwik Trip, Speedway, Casey’s General Store, Wawa, Sheetz), drug stores (such as Walgreens, CVS, Rite Aid), dollar stores (such as Dollar General and Dollar Tree), ethnic/specialty grocery stores, and, to a lesser extent, restaurants.
So not only is the grocery sector competitive, but grocery stores compete with companies in other sectors that are themselves competitive as well. Even if someone only has one grocery store nearby, there will almost certainly be access to one of these other businesses with which grocery stores compete in providing food to customers.
There’s simply no reason to think that sometime in late summer last year, this industry that was hyper-competitive in 2019 decided to stop competing and start raising prices in a conspiracy against the public. But that’s apparently the story Elizabeth Warren wants you to believe.
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