Bob Neal

Inflation is everywhere. We Americans have experienced it most keenly at the food store and the gas station.

Bad as it is here, look at this. The United Kingdom’s 8.7% inflation nearly doubles our 4.9%. Turkey just reelected a president despite inflation at 39.6%. Not to mention Argentina’s 109%.

As we emerged from the pandemic and prices rose, we were told the supply chain had atrophied due to low demand, that companies had sold inventory rather than make more, and so on. We’re well past all that, though, so, let’s try to figure why food prices stay above pre-pandemic levels.

At least two causes work to keep food prices high. First was the labor shortage after the pandemic, driving up wages. Then, unchecked consolidation in the retail food industry and its new twist, called “greedflation,” in which corporations raise prices rather than compete on price.

In 2020, about 3 million people retired. That’s more than twice the number who retired in 2019, before COVID-19, and a million more than in 2018. And the number kept rising well into 2021. As we came out of the pandemic emergency, those million-plus early retirees weren’t readily replaceable. To get employees, companies had to raise wages, sometime significantly.

I wrote on Jan. 8, 2022 that meat industry wages had risen to $22 an hour from $14.50. When I worked through the math, that added 24 cents to the price of a pound of red meat or poultry.


The early retirements have ended, though, and a significant share, maybe more than half, of those who retired early have gone back to work, at least part time. The leveling off in inflation, though, remains painfully slow. As the work force grows, wages stabilize. At least usually.

Lots of workers switched fields during or just after the pandemic. My younger son enrolled at Southern Maine Community College for an electrician’s certificate and left a decade-plus of kitchen work for the electrical industry. My older son moved from kitchen work to retail and is earning 42% more than in 2020.

A steep fall in immigration added to the labor shortage. From 2016 to 2020, legal immigration fell by nearly half, from 1.2 million to 700,000. That’s another half million people a year who weren’t available to work when the emergency ended, and, as we all know, new immigrants are often willing to do jobs shunned by people born in this country, such as meat packing.

Economists at Allianz, an insurance company, estimate that about 10% of the rise in food prices is corporations seeking higher profits.

Consolidation in retail food sales has much to do with that. The share of national food sales by independent stores has fallen to 33% since the 1980s, when it was more than half. With Kroger’s purchase of Albertsons, five corporations will control 55% of retail food sales. (Albertsons owns Shaw’s stores, and Delhaize, a Belgium corporation and one of the five, owns Hannaford.)

With great market share comes great power, and corporations such as Walmart have the power to force suppliers to sell at whatever price the buyer wants. Some suppliers even sell at a loss, hoping to offset the loss by getting higher prices from other retailers.


Enter “greedflation.”

Isabella Weber, an economist at UMass, poked the bear of the dismal science in suggesting price controls to combat greedflation. (Anyone who pokes economist bears can’t be all bad.) While I may not buy her idea of price controls, her finding seems solid: “A company like Pepsi has such a strong market position that they can meet demand wherever it is.”

Pepsico is becoming a textbook case for greedflation. It’s a conglomerate that has moved well past high-fructose-corn-syrupy soda to own Frito-Lay, Lipton Tea, Tropicana and Quaker Oats.

Here’s a bit of a transcript from an NPR broadcast last week that quoted Hugh Johnston, the CFO of Pepsi, and Ramon Laguarta, the CEO of Pepsi.

Johnston, on how Pepsi plans to compete: “Around innovation and brand building and execution. So, we think the environment is well set up where pricing can be positive going forward. That’s not a temporary thing based on what’s happening in the environment right now.”

Laguarta added: “If you look at the majority of our conversation with our customers centered around (sic) growth and how do we develop our category, continue to bring consumers into the category, continue to bring new occasions into their category. And that’s the role I think we played to our customers and to how we create value for the company long term. So, we’ll continue with that focus, trying to create brands that can stand for a higher value to consumers. And consumers are willing to pay more for our brands. We’ll continue with that philosophy.”


Wow. Did you know business executives could talk as obliquely as bureaucrats and professors?

A Bloomberg reporter turned such fluff into English: At the end of April, (Pepsi) reported that it had raised the average price across its snacks and beverages by 16% … (this) year. That added to a similar price increase in the fourth quarter of 2022 and increased its profit margin.”

The upshot? Albert Edwards of Société Générale, a financial services company in France, said: “Inflation is going to stay much higher than it needs to be, because companies are being greedy.”

They charge higher prices because they can. That’s a lousy reason to do anything.

Pepsi’s high prices don’t affect Bob Neal. The last soda he drank was a Moxie (not a Pepsi brand) about 1998. He doesn’t eat potato or corn chips out of bags. Yet, inflation hits him, too. Neal can be reached at

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