A handful of corporation own most of the grocery stores, but grocery prices remain reasonable, nowhere close to as insanely priced as rent.
The difference is real competition: there's only so much land that exists, and localities only allow so much housing on that land. Demand goes way up, supply goes up only feebly, the result is predictable.
I have 4 or 5 grocery stores within a short walking distance of me right now. I can buy roughly the same stuff in all of them. I usually go to whichever is cheapest for the stuff I want to buy. They differ in sizes, so they don't stock all the same things, but there's nothing stopping any of them to sell any of the products the others do. This is how healthy competition works.
It's the supermarket doesn't want housing on top. If it is the only way to get the location and the location is incredibly good, then the supermarket will accept it. Leasing to a supermarket is incredibly more profitable than leasing or selling housing.
A supermarket is in the business of buying food in bulk and then offering portions of food suitable for a shorter time period. A gas station buys 8000 gallons of gas from a tanker and offers it by the gallon at retail. Target/Walmart buy pallets of jeans and offer them individually to consumers. The supermarket didn’t grow the food, gas station refine the fuel, nor did Target manufacture the jeans.
A landlord is in the same business but for housing: buying in bulk (in this case in the time dimension) and selling a shorter time period’s worth of housing.
What I've noticed in my town is that the cheap employee-owned grocery store on that side of the tracks has had the same prices for years. But the stores on the other have increased their prices significantly, charging what the market will bear.
No, a grocery store is like a sub-developer, buying in bulk and splitting it up.
There is no other physical necessity sold on a time dimension. I cannot rent you water, or rent you food. Once the grocery store has sold a certain amount of food, they have to re-enter the market and buy more. Once a gas station has sold a certain amount of gas, they have to re-enter the market and buy more. Once a sub-developer has sold a certain number of homes, they have to re-enter the market and buy more.
A landlord does not. A landlord is not the same thing.
You don't have to go that far to see this effect. Grocery stores in two different neighborhoods of the same city can have wildly different pricing for the exact same product. A lot of times both stores will be owned by the same company and their shelves will be stocked by the same truck.
> places that used to have a competitive grocery environment
This is what I’m seeing, anecdotally. In towns with more than one non-affiliated grocer, prices are cheap. In towns with consolidated groceries, prices are higher. Enough that the “savvy” shoppers, i.e. those with a car and time and liquidity to enable bulk buying, drive to the next town over.
I'm guessing you pay significantly more for food at these local places than you would at a big box grocery store. Plus, you're less able to buy in bulk to get those time&money savings.
The other big factor that people miss in these comparisons are schools. Generally speaking housing in dense places with good schools is usually very expensive. People that can't afford that typically have the choice between crappy urban schools or good suburban schools. Most of them choose the good schools.
In a price defined shortage, there are always alternatives, it's not so black and white:
- you can get a smaller apartment
- you can get a not so nice apartment, but with space
- you can get an apartment further away from points of interest, meaning it's cheaper but you have a longer commute
This is very similar to free market for groceries: in communism you don't get groceries on the shelves. You get them only if you are lucky enough to be around when a delivery is made.
In capitalism, some groceries might be more expensive, but you can always buy cheaper ones, or travel longer to buy from cheaper stores.
Not to mention the effect of neighborhood re: nearby shopping options. I've lived in very poor and fairly rich neighborhoods, and the difference in quality of local grocery stores is dramatic. There are chains I didn't realize even existed, because they targeted different class neighborhoods. And even within a chain, the level of effort put into a given franchise location can vary pretty dramatically as well.
And that's in the states. In the UK, it's a running joke that the different supermarket chains are subdivided along class lines.
This is a big country and nobody has their feet nailed to the ground.
Your local supermarket may be the only one in your village, but the next village is easily attainable. Something being more convenient doesn't make it a monopoly.
I grew up in the Air Force. My mom would always shop at the base PX because it was cheaper, and sometimes it was a 30 minute drive away, passing store after store to get there. To make the drive worthwhile, she'd buy 2 weeks worth of groceries at a time.
Corner stores also have their own expenses to deal with. They rarely have the same access to suppliers as grocery stores, nor do they have the access to the same prices for their goods. They may be paying the same for labour, but they are typically dealing with much lower volumes. I don't have a clue on how the cost of their leases compares, but it is going to affect the price consumers pay. If it really was as simple as them being opportunist capitalists yaking advantage of people, we would see far more corner stores in this world.
Groceries are like the pinnacle example of capitalism and competition working well. Everyone loves grocery stores, and we have a wonderful product selection for very cheap prices!
I don't know if we have just "a small handful of companies" or not, but it certainly doesn't work as a compelling example for me of an anti-trust problem.
> in my experience, grocery store prices in a city are pretty uniform.
Good lord, ours aren't. Our most-convenient grocery store has prices like 25% higher than Wal-Mart, ~15% higher than a couple larger grocery stores farther away, and 10% higher than Target.
>If people in a community have to drive three hours for food, then there will be enough demand that someone will open a grocery store. When there's an economic vacuum left by a closing superstore, other, possibly smaller, stores will come back and fill it. It's simple economics.
Real life doesn't always play out like simple (simplistic) economics.
E.g. sometimes nobody will do the investment to build one for years.
Or it will much smaller and more expensive that a Walmart, but enough to stiffle anybody opening a competitor.
Back in the 90s in L.A., I remember that that some grocery store chains were routinely more expensive than others (e.g., Vons always cost more than Lucky’s). I found it interesting while exploring some neighborhoods that in lower-income parts of the city, I was more likely to see the more expensive grocery chain than the less expensive one. And that’s putting aside the whole food desert issue with South Central where there weren’t any grocery stores at all. I’m not sure how the grocery situation looks now.
The difference is real competition: there's only so much land that exists, and localities only allow so much housing on that land. Demand goes way up, supply goes up only feebly, the result is predictable.
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