Price gouging

Did someone say "greedflation"?

When I can go to a sit down restaurant and have a fresh cooked meal for less than going to mcdonalds, something is wrong. I will never eat there again. Pay more for less, and it's absolute trash.
- Isn't that wild? My favorite mom and pop shops are at least 33% less expensive and made with solid ingredients (especially real ice cream milk shakes lol)
I wouldn't recommend making this into a sticker and putting it on the door of these places so people can see. Don't do that, it would be vandalism.
Almost as if in capitalism, a system where companies are free to choose their prices, inflation could be caused by companies choosing to rise their prices...
Leadership at these companies is personally compensated based on how quickly the company grows. They’re trying to maximize growth of the company by absorbing demand from the higher end, but in the process of doing so they end up pricing out the low end of the market, leaving low end consumers under served. They’re growing, they’re leadership is getting compensated better than ever, but now it’s difficult to find affordable places to eat out.
Theoretically what is supposed to happen in such a situation is new companies come in to take advantage of the gap left, but that’s not really happening because investment is all being focused on higher return opportunities. The low end stuff is still profitable and has potential for growth, but it’s not profitable/growing enough to attract investment over stuff that is perceived to be growing more aggressively.

Unregulated capitalism will be the death of us all.

Capitalism will be the death of us all.
- Only once there's no longer a profit in keeping us alive.
  So we've got a couple good years left in us!
- The death of us all will be the death of us all.
- I'll take it one step further: currency was a bad idea that turned resource allocation into a number-go-up game.

Just a reminder from a very price sensitive shopper that ALDI barely raised any prices through all of this bullshit.

My weekly grocery bill rose from about $80/wk at Aldi to about $110/wk at Aldi in the last 3 years while my shopping has largely remained almost identical. That's an increase largely in line with overall inflation during the same period.
Also during that same period my house nearly doubled in value for...reasons I guess? I seriously cannot afford to buy a new house in the current housing market so something is going to give at some point...any decade now...
I started shopping at Aldi almost exclusively and it's been fantastic.
- My only complaints about Aldi are that the selection is a bit limited (though they often have some interesting stuff in the "aldi finds" section) and the produce can be a bit hit or miss, but I always do the bulk of my groceries there, then get the rest at Kroger. (Their prices aren't great, but they're the cheapest in my area beside Aldi.)
Same with Winco
- I love WinCo! They have such great prices and so many options. They even sell this pre seasoned carne asada taco beef that is fucking amazing! I've never found it anywhere else. It tastes like legit Mexican carne asada tacos.
Has their produce improved any? A few years ago it was pretty sketchy at the Aldi here.
- That probably depends a lot on your locale. It's always been pretty ok at the one I shop at. Their fruit is usually good. The biggest difference is that for stuff with short fridge life, like salad kits, you usually only have a few days to use what you get vs. maybe a week or more at a larger store.

Collusion

Isn't the next step more shrinkflation? Lower sticker prices, but also reduced size products to keep profits right where they're at now.

True. I'm sure the part they're not reporting is they reduced prices by 5% but didn't mention they also reduced per product quantity by 10%.
Just enough for customers to not notice but think they're getting it for cheaper, while actually paying more per unit of quantity.
They are already doing this. Aldi raised their Elevation protein bars by a few pennies, compared to the competition raising prices by dollars; BUT they dropped in size by a THIRD. So people think they're getting a great deal, but are only getting 2/3 of the product they used to.

News reads more and more as advertisement. "Walgreens just lowered prices!" is what I'd expect to see between news stories not in them.

Greedflation. Call it what it is.

Honestly, I was never a fan of theft, but these big corporations deserve it after these past 3-4 years.

I root for everyone stealing clothes and food from Macy's, walgreens, etc.

Just DON'T steal from your local mom and pops store!

Remember: If you see someone stealing food from a large company store... No you didn't.
- I can see the appeal of stealing something expensive, where the expected payoff relative to the risk and consequences of being caught is quite large, but to risk theft charges for food? I don't think anyone would steal food.
  If they have a choice, that is.
Y'all have local mom and pop stores?

Pretty sure laws exist that are supposed to prevent price gouging, but they require a government that actually enforces said laws...

"Laws" are not the only method humanity has come up with for defending each other against fraudulent and predatory behaviors. Where law has proven incapable of preventing victimization, the guillotine has a proven track record of convincing the ultra rich to stop thinking about their wallets and to start thinking about the needs of the people.
- You are obsessed with the idea that you're going to set up a guillotine to punish the wicked. You are an impotent nerd that gets off on violent fantasy online.
  Calm. Down. You can't even organize effective action against your own diminishing dreams. Stop advocating for violence. You're in no position to handle it.
  Go stroke your gun and fantasize about how it makes you strong and important; meanwhile, the world will, much to your confusion, continue not caring about your opinions.

Corporate Greed will lead to humanity's end.

Dont let em sit satisfied on these pitiful reductions either. Make them drop enough to at least undo some of their thievery

Canadians will force our grocers to do the same by crushing loblaws.

Obligatory fuck Loblaw's.

Businesses reduced prices when people started buying less of their product? HOW COULD IT BE.

Everyone wants a ton of cheap shit and they feel like price is owed to them. You want prices to be lower for shit? Stop buying shit. I assure you, that will really freak them out.

You want to see CEOs lose their jobs? Stop buying shit. You want to see the managerial class shrink? Stop buying shit.

The fact remains, no one is going to stop buying stupid shit. The entire global culture, to varying degrees but with few exceptions, is tilted towards consumerism.

Everyone keep doing what you're doing. Everything is fine. No cause for panic. You don't need savings. You don't need property of any sort. Want a song? I'll rent it to you. Want to live somewhere? I'll rent it to you. Movie? I'll rent it to you. Education? I'll loan it to you.

There are people with property, and those allowed to use it for a fee. Welcome to neo-feudalism.

Guillotine-themed peaceable assemblies freak out the managerial and executive classes considerably more than an uncoordinated boycott ever could.
- Good luck.

I don't think there should be price caps, but, I think we could get somewhere having a maximum amount you're allowed to raise your prices by in a single year and how long you have to take to get there.

I think this rate should be tied to federal interest rates to create a competing class interest to the owner class wanting interest rates to stay low forever even if it breaks the bank for everyone else.

I mean, just break up the massive corporations. Capitalism requires seller competition in the marketplace in order to provide an incentive to drive down prices. If there are too few players, they can easily make unspoken agreements to fuck over consumers.
- The problem is we have historical evidence to show that that doesn't exactly work. Standard Oil's broken up parts have mostly been able to informally collude with one another on "turf" and in some cases even defy having been broken up to reacquire each other.
but, I think we could get somewhere having a maximum amount you're allowed to raise your prices by in a single year and how long you have to take to get there
We already have this. It’s called a free market and when you raise prices too high your competition takes all your business. It’s beautiful and everybody hates it due to multiple decades of anti-free-market propaganda.
- Found the libertarian
- when you raise prices too high your competition takes all your business
  The theory works beautifully... For the first 30 years of capitalism. After a few decades, the more profitable and most competitive companies grow so much through consolidation of the market, that due to sheer economy of scale it becomes impossible to compete with them if you're not an equally well-established company in the same sector. Oligopolies and monopolies form, and it gets to a point where you can't outcompete them because the capital investment to be competitive would be so bonkers, and the presence of the two companies creating the same product at such humongous scales would saturate the market so much, that it makes absolutely no sense to try and outcompete them. And even if competition started to really appear, the bigger company buys it and competition is undone again.
  You guys live in a parallel world, your axioms of "free market" simply don't hold up to the slightest scrutiny.

Marxists: inflation isn't caused by increase in wages that drive up demand, its caused by companies conspiring to increase prices. This was proven 125 years ago in Value, Price and Profit...

Non-Marxists: god can't you ideologues just stop repeating the same outdated theories? There's no conspiracy, class isn't real

Inflation: happens

Workers: I think there's a conspiracy to raise the prices of things because wages went up

Corporate and government overlords: no, you see increase of wages creates increase in demand of goods which increases prices, I went to Yale

Workers: i just got a raise and yet I can't afford to eat anymore

As a communist who hates Trump for being a rapist, racist pos, the recent inflationary period didn't happen during his mandate.

In the market, this is referred to as "price elasticity". The basic concept of it is: if you charge less, you sell more, and can increase profits. There's obviously limits to this (which are largely unknown) if you charge so little that everyone who would buy your product is buying your product, then reducing costs any more than that, will result in less profit. So there is a "sweet spot" of pricing that returns the most money.

I learned about this more than a decade ago and what I was taught at the time was that there were very few items that are generally considered to be very inelastic for pricing: petrol (gasoline), booze, and tobacco. Gas, because everyone needs to drive, booze because drunks are going to drink, and tobacco because nicotine addiction. Even then, there's still some elasticity in the pricing, more so as time marched on; stuff like hybrid cars, work from home, etc, for gas, booze, with the availability of (kind of crap) liquors that are priced accordingly, and the force of the anti-smoking campaigns/concepts/etc.

Other things were always considered far more price elastic, like food. During and after the pandemic, options for purchasing food were limited, so they fell into a more price inelastic status, since demand didn't change, but supply became more limited. I'm sure more than a few things like farmers markets, became inaccessible. The people who would be using such inexpensive options were suddenly forced into buying from grocery stores and price fixing and gouging was more possible; not dissimilar to how gas prices work. Each location would raise prices to match whatever their "competitors" were doing.

Now that people have started to find alternatives, either by growing a portion of their groceries, or finding less expensive alternatives or simply buying less, companies are trying to find where the "sweet spot" is for maximum profits.

This isn't a new thing, nor is it unique at all. It's the reason that booze, gas, and tobacco have some of the highest tax costs of any products. If companies/government/producers believe they can charge more to earn more profit overall, they will. What's happened is that they dug so deep in raising prices that profits took a dip. They're selling each unit for more profit, but so many fewer units that they make less overall.

It is the way of capitalists to find the highest price that people will pay and still buy a thing.

They have clearly gone too far, and it has cost them their precious profits.

lol CVS sends me coupons all the time, and I'm always dumbfounded what to buy because their prices are sky high

Yes. Corporate greed is a real thing. Consumer choice is a real thing. The relationship between supply, demand, and pricing is a real thing.

The market is a real thing! Glad we’re on that same page about that.

Sure! You just interprate it differently.

So the market works. What's the issue then

I'm sorry, but the whole "inflation is a monetary phenomenon caused by excess money in the economy" neoliberal trope has been scientifically debunked so many times, that it's inexcusable that people throw it around.
Look at any serious study of the 2022 inflation and they all point to the same: rise in energy prices, bottlenecks in the supply chain, and companies artificially increasing prices above the increase in their operational costs to increase profit.
If you're still not convinced, please explain me how the fed creating dollars led to inflation in the Eurozone, or why if it's a monetary phenomenon, prices didn't increase homogenously in European countries that share the same currency.
To people who don't watch the stock market: this didn't happen. The "government" can't physically print that much money per day. And even if it could, stock exchanges don't accept cash.
The money supply increased about $3.5 trillion in 2020, as you can see in this chart. Nowhere near $2 trillion per day.
Also, the US Treasury and the Federal Reserve (separate organizations) don't buy stocks. They buy Treasury Bonds or sometimes mortgage backed bonds, although that last happened during the 2008-9 recession.
After reducing the federal funds target close to zero during the financial crisis, the FOMC turned to another type of policy to provide liquidity to the financial system and to encourage recovery: the purchase of large amounts of longer-term U.S. Treasury securities and mortgage-backed securities, also through open market operations.
https://www.stlouisfed.org/open-vault/2019/august/open-market-operations-monetary-policy-tools-explained

I mean isn‘t what‘s described here also just basic supply/demand?

Unfortunately, the demand for things like food doesn’t go down just because you don’t have money
- Exactly! In economics there's a concept called price elasticity (Incorporating two related principles, elasticity of supply and elasticity of demand).
  Elasticity of demand is the more relevant one here. Products with elastic demand are those that consumers are quicker to change their buying habits around. For instance, luxury items. Products with inelastic demand are generally actual necessities (like groceries), where you're gonna have to buy them one way or another. You can look to alternate suppliers with better prices, but when they're all gouging you have no choice but to buy from one of them.
  In the long run this can indirectly be forced to change. If it gets bad enough that people en-mass started growing their own food at home, this could cause the suppliers to reconsider their prices. (I know that's a far-fetched example. I'm just using it to broadly illustrate my point.)
- Fortunately there’s enough competition in our food market that food is abundant and cheap. We haven’t had any well-intentioned food redistribution schemes to screw up our market in a long time, so we have a very healthy food market that’s doing a great job of feeding everyone.
- Sure, at the basic level, everyone needs food. But you can get a lot more granular about it. For example, a lot of people buy things they may not need to survive, like snacks/desserts. Or perhaps they do buy items they need, but they usually get versions that cost more (whether that be because the particular store is more expensive overall, or simply because they’re buying items that are more costly than things at the lowest end that still allow you to survive like beans and rice).
  The point is, most (not ALL) people can buckle down their food spending in some way or another, and I think that’s what we’re seeing here.
It is. It's partly walking back price gouging (which happened because there was no government there to stop them) and partly a correction for the loss in buying power overly greedy price gouging during high inflation has caused.
No, it's greed. They aren't hurting for supply, so there's no other reason to raise costs other than greed.
- But the post says „they stopped buying and price goes down“ reduced demand makes price go down. I‘m not defending corpos or claiming that they‘re not greedy. I‘m just discussing what is stated in this post because it‘s a bad example of greed.
It absolutely is. Which is why the prices of necessities such as food, electricity, water, housing, basic clothing, healthcare and education shouldn't be up to supply and demand to decide.
It is. Everybody’s been mis-educated about what free markets are (I think a lot of them actually believe the term means “The market is free to hurt people”), so we get to pretend like we’re discovering basic economics again.