By Peter A. Coclanis
Though cynics may question her motives, Kamala Harris’ recent call to ban price gouging on groceries has received a lot of attention – and for good reason.
The cost of food has been a big concern for Americans since the height of the COVID-19 pandemic, with U.S. food prices rising 25% between 2019 and 2023. While U.S. food inflation slowed considerably in 2024, grocery prices are still up from prepandemic numbers.
Price hikes like this are as painful as they are aggravating, and they can have real effects on both household spending and the broader economy. So it’s not surprising that the topic is coming up on the campaign trail.
But oftentimes, complexity can get lost amid the politicking. Here, economic history – and economic historians like me – can provide some context.
How Americans spend their food dollars
For starters, despite the run-up in food prices in the U.S., there’s little evidence of price gouging in the grocery industry today.
“Price gouging” is notoriously difficult to define, but the term is usually invoked after a supply or demand shock of some kind, when sellers are said to take advantage and jack up prices, particularly for basics such as food or gasoline. Concern over “gouging” goes way back – in some ways, it can be seen as an outgrowth of medieval Christian injunctions against mercantile greed.
Although many states have laws on the books against price gouging, such laws have proved difficult to enforce. In the case of the U.S. grocery industry, profit margins — traditionally razor-thin at about 1% or 2% — remain small even today.
What’s more, it’s important to note that food prices in the U.S. — relatively speaking — are the cheapest in the world, and have been for a long time. This is the case whether measured in terms of disposable personal income or in terms of percentage of household expenditures.
For example, U.S. Department of Agriculture data shows that in 2023 — the most recent year for which data are available — Americans spent about 11.2% of their disposable personal income – or income after taxes – on food. That was unchanged from 2022.
This includes expenditures for both food at home — generally purchased at supermarkets and other grocery stores — and food purchased “away” at restaurants and the like. Interestingly, the “away” component has been growing as a proportion of total food spending since the onset of COVID-19.
Grocery prices around the world
No one likes to pay more for food, but a little comparative data can reduce one’s sense of victimization, if not alleviate the pocketbook pain.
Cross-national data compiled by the USDA shows that in 2022, Americans spent less on food as a proportion of total consumer expenditures than people in any other country. People in many other nations spent two, three or four times as much in percentage terms, and sometimes even more.
The differences were greatest between the U.S. and low-income countries in South Asia and Africa – Bangladesh, Myanmar and Ethiopia, for example – but were also quite sizable between the U.S. and middle-income countries such as Argentina, Brazil, China, Costa Rica and Mexico.
These differences aren’t altogether surprising. Why not? Because as the German statistician Ernst Engel first noted in the middle of the 19th century, as family or household income increases, the proportion of the total spent on food declines. After all, you can only eat so much no matter how rich you are.
Scholars have found that Engel’s insight still applies in the contemporary world, which provides context for the sharp distinctions between low-income and middle-income countries and the U.S.
That said, however, there are big differences between the U.S. and other high-income countries such as Japan, Sweden, Norway, France and Italy, with the U.S. percentage spent on food considerably lower than in any of these other rich countries. This is because economies of scale are more important in American agriculture, among other reasons.
To be sure, if so inclined, one can point to certain negative environmental externalities in American food production and question the ways animals and laborers are treated in the American food system, which prizes efficiency — or at least low prices — above all else.
But food that is dirt cheap in comparative terms, even in a time of rising food prices, is a problem virtually every other nation in the world would love to have.
Peter A. Coclanis is Professor of History and Director of the Global Research Institute at the University of North Carolina at Chapel Hill.
The Conversation arose out of deep-seated concerns for the fading quality of our public discourse and recognition of the vital role that academic experts could play in the public arena. Information has always been essential to democracy. It’s a societal good, like clean water. But many now find it difficult to put their trust in the media and experts who have spent years researching a topic. Instead, they listen to those who have the loudest voices. Those uninformed views are amplified by social media networks that reward those who spark outrage instead of insight or thoughtful discussion. The Conversation seeks to be part of the solution to this problem, to raise up the voices of true experts and to make their knowledge available to everyone. The Conversation publishes nightly at 9 p.m. on FlaglerLive.
Atwp says
Good article.
The Sour Kraut says
Just look at the increase in profit margins of the largest food producers in the U.S. They are publicly traded companies so the information is made public.
Lisa says
I’ve read this article 3 times and I’m still a little confused by it. I cannot agree with my GROCERY BILL BEING THE CHEAPEST IN THE WORLD. First I really don’t care about what the price of food is in another country. I live in the United States of America and my food bill is not cheap or wait I may be lying because it really depends on what I’m buying and where I’m buying it from. The picture shown is Target, I stopped shopping at Target long ago when I found some of their items cheaper at another store. And now that other store is creeping up. A side note, my children love pizza we have (had) pizza night once a week not for nothing but the Pizza place we’ve ordered from for the past year or so just increased their prices. Not .25cents or .50cents but most if not all items on the menu were increased $2.25 sorry but really???????? So now when I go to Walmart cause Walmart is just about the only place I can shop in I buy frozen pizza and that’s pizza night for us. By the way I am not poor I’m on a budget like most folks but with the utility bill increasing, the electric bill increasing, our taxes increasing and taking care of my children’s needs because not only the food prices increasing clothing, shoes etc are increasing. I can continue but I will end it here cause it’s just my opinion and personal experience.
Ray W, says
Hello Lisa.
It is cheapest both by percentage of “household expenditures” and by percentage of “disposable income”, not by overall income. The two categories are commonplace in economics and can be used for comparison purposes, as they are here.
DaleL says
I’m old enough to remember 1978 to 1982. Inflation over those four years was 48%! With the COVID pandemic and stimulus money from both Trump and Biden, there has been a spike in inflation. Prices from 2020 to 2024 have risen 21%.
Publix sells pizza dough, both in a ball and already rolled out. A jar of pizza sauce, some pepperoni, a little onion, and pizza cheese will add to the cost. Still, the pizza will be fresh, tasty, and less expensive than frozen.
I love living in a country that is metaphorically the “shining city upon a hill”. People want to come to our country, whether we like it or not. Imagine living in a country that people desperately want to leave.
Laurel says
DaleL: I make pizza at home, and it’s better than most restaurants. That Publix pizza dough nearly doubled in price over the last couple years.
The thing is, I find myself standing in front of the lettuce just gaping at the nearly $8 price in Publix, when you can buy two for the same price at Aldi, or the $9 eggs at Publix v. the $4.50 at Aldi (again, when they have them).
Whiplash says
This person totally personifies the saying that: “Those who can “DO” and those who can’t do, TEACH”!
He has no idea what he is talking about! We are paying almost 30% more for food and wants us to be grateful that food is cheaper than it is in other countries!
I started as a bagger for Albertsons Stores and retired as Counsel and Director of Government and Public Affairs and can tell you that supermarket profits over my 36 years have always been in the 1% to no more than 35. Most years they were under 2 1/2% where they remain today! There is no price gouging going on or as MS Harris says, Gauging!
Ray W, says
Hello Whiplash.
I am not saying you are wrong in your conclusions. I, too, grew up reading about tight profit margins in the grocery business. But I looked up Publix’s sales and net earnings for 2022 and 2023.
In 2023, Publix’s sales were $57.1bn, up 4.7% over 2022, when sales were $54.5bn.
In 2023, Publix’s net earnings were $4.3bn, up 49% from 2022’s $2.9bn.
Make of this what you will. Me? I don’t claim to be an economics scholar. At best, I am a curious student.
Maybe a net earnings figure that is 7.5% of Publix’s overall sales equates to a net profit margin. Maybe not. That net earnings increased by 49% when sales increased by 4.7% is interesting.
I looked for definitions. Net earnings are considered synonymous with net profits. However, I did find a definition that had net income as the last line item on an income statement, meaning net income is after taxes had been deducted. That definition held that net income and net earnings are the same. If that is so, Publix’s net earnings likely were $4.3bn after taxes had been deducted and the 7.5% figure is the actual profit margin.
It may well be that Albertson’s in your 36-year career never engaged in price gouging. The jury is out on Publix. You comment that you never saw anything above 3.5% net earnings in your 36 years. It looks like Publix saw 7.5% last year.
Laurel says
Ray W.: Well, I’ve been shopping a long time, and I’ve seen packages get smaller, shopping bags get smaller and prices go up. That’s common. I don’t expect things to stay the same. The last couple of years, Publix has repeatedly shocked me! So has some other shops locally. What I do know is, there are people who work at the Publix near us who literally cannot afford to shop there, and go over the bridge.
Maybe somewhere in the middle of receiving products and selling products, and paying employees, something is off.
I would be perfectly happy if I could bring my own bags and Publix would cut the prices. Funny, you’d be surprised how many times I recycle Trader Joe’s and Whole Foods bags at Aldi! It’s worth it.
protonbeam says
Why does Flagler Live keep rerunning articles by this hack? Most are intellectually incoherent and provide anecdotal or falsely comparative information to what purpose I am not sure – why are we comparing food prices in countries who may rely on imports or whose GDP or income levels are not comparable or whose cultures, laws, rules and tax structures are vastly different.
The author attempts to intermingle socio economic and other factors and tosses in Nigeria – as of TODAY in Nigeria you can get a loaf of bread for $1.37 US and a dozen eggs for $2.01 – again not sure what were comparing – or I guess this authors approach of “well its isn’t so bad” “look over here while I distract you” – then by his logic what are LBGQT activists complaining about – its “not so bad here in the US” I mean in two of the countries in his chart they will kill or imprison you for being LBGQT ) Nigeria being one – so apparently were just fine here at home.
This article felt like a scolding to those who rightfully complain about food price escalation in an effort to blame everyone and everything in the world except the terrible leadership herein the US that got us here.
Ray W, says
Your comment presumes that you are “rightfully” complaining. Maybe you are. Maybe you are not. You might be wandering through life fooling yourself. Your own argument presents as intellectually incoherent. Was that intentional on your part or are you so innumerate that you don’t understand the premise of the article?
The author states that he used USDA compiled “cross-national” data for his comparisons, not his own data. Did you miss that part? Nations all over the world gather standardized economic data so that they can better understand what is happening both at home and abroad.
USDA data shows that Americans now spend a lower percentage of both their “disposable income” and “household expenditures” than do citizens of any other country.
And I recently posted a comment based on a different article that detailed the quantifiable fact that overall wages have finally caught up to and passed Trudenflation in this country. That article said basically the same thing.
As a percentage of national income, we now spend on average less on food than we did in 2019. Some of us likely do spend more (you might be one of them), but on average we spend less as a percentage of our wages.
protonbeamexposure says
You question if I understand – you do know I assume that your statement quote or requote “As a percentage of national income, we now spend on average less on food than we did in 2019” is misleading. We are at less of a percentage because as the USDA cites (yes you have to read the details, not just the headlined, consumer have adjusted behavior by buying less and eating out less – so we spend less because prices are higher and people are forced to probably because the prices are so high (duh) and they are spending more on insurance, fules, rent, etc. –
Ray W, says
Okay, protonbeamexposure.
All my life food tastes have changed for a lot of different reasons and companies have pivoted their strategies to keep pace. Fifty years ago, ready-to-cook fresh prepared complete meals were almost non-existent at Publix. Now, display cases contain sections devoted to such meals. Decades ago, frozen pizza had dough compared by pundits to tasting like cardboard. Today, the variety and quality of various doughs are much better. Yes, I long for the Pinto MSRP in 1976 of $2,895, but the minimum wage of that day was $2.35 per hour. Today’s Versa starts at $16,680. The Versa is more efficient, lasts longer, has better paint, has more standard and optional features, and is simply a better car in many ways. Nothing remains the same for long. On average, we make more than we did five years ago. On average, we spend more than we did five years ago for the same food items. But that doesn’t change the fact that those who study agricultural trends conclude that we are spending a lesser percentage of our disposable income today on food than we were five years ago.
Kim says
This article is so skewed as to be preposterous. It appears to simply provide data to support the author’s view. Of all of the countries listed in the chart, the U.S. is by far the highest average income country ($80K per year average), with the closest of those in the chart being Germany at $62K, a distant second. These referenced figures are from OECD data for 2023. So, of course, “as a percentage of household expenditures”, the percentages would be higher for all the other countries. Their income is substantially lower than ours (and remember this is also skewed for us since we have a larger portion of billionaires and millionaires when compared to most of these other countries). Just over 50% of U.S. household earned less than $75K in 2023 per Statista.
I am fortunate enough to have traveled extensively in Europe within the last year. I found it shocking how much lower food prices (both groceries and restaurants) were, compared to ours. I have traveled to Europe for business my entire adult life and have never seen such a wide price discrepancy. In fact, Europe used to be substantially more expensive than us. And, I was not in particularly touristy locations. So, I think this would require a deeper look. If, as the author suggests, we prize efficiency, we should have even lower prices. Checking profits within the food supply chain would be a better check on whether there is “price gouging” going on or not. I could go on, but I’ll stop.
Ray W, says
Are you calling USDA “cross-national” statistics preposterous? How do so many FlaglerLive commenters miss this most basic premise of the article? Did none of you click on the link the author provided?
I went to the USDA site. Its National Agricultural Statistics Services (NASS) has been collecting international agricultural economic data since just after WWII. The agency has been collecting national agricultural data for about 150 years.
In 1961, NASS was reorganized to take on data collection previously performed by another federal agency. NASS now publishes just under 500 national reports each year.
Kim says
Ray, I did not say the statistics from USDA were preposterous. And, yes, I went to the link. I said the article itself is so skewed it’s preposterous. Logically, a country with 25% lower average income is probably going to spend more on food as a percentage of that income, just as people in our country with a 25% lower income will. Please don’t assume that people don’t read just because they don’t agree with your viewpoint. I didn’t miss the premise of the article. I think it’s a flawed premise, as it’s incomplete.
Ray W, says
Hello Kim.
By definition, every statistical analysis is incomplete. If we collected all of the data on money spent on every last type of food, we wouldn’t need a statistical analysis, because we would have a complete analysis. But collecting, compiling and interpreting every last bit of data on every last food item that is available for sale all across the country would be very expensive and time consuming.
So, for many decades, USDA has been collecting among other things Bureau of Labor Services CPI data on the prices of eggs, butter, bread, fish, meat, vegetables, fruits and refined food products. So have economists in other countries. But the CPI data doesn’t collect prices for every last type of egg that can be purchased off a shelf at a Publix; it collects data, as I recall from years ago, on a dozen large eggs.
If for year after year and decade after decade, the USDA has determined average disposable income and compared it to the cost of a large basket of many but not every last possible food item and has published a percentage of disposable income devoted to food costs, then it is disingenuous of you to claim that it is incomplete. Of course it is incomplete. It is supposed to be incomplete.
As of 2020, the average number of items for sale in a supermarket is 39,500. Many of those 39,500 items are not food items. If the CPI is determined in part from a basket of, say, 2000 food items, then your average Publix carries thousands if not tens of thousands more food items in just one store.
You remind me of cigarette company spokesmen from my youth. Scientists exposed mice to high levels of nicotine and concluded that there was a relationship between nicotine exposure and cancer. The spokesmen immediately claimed that the scientists did not study rats. Therefore, the study was incomplete. Researchers then exposed rats to high levels of nicotine and concluded that there was a relationship between nicotine and cancer. The spokesmen immediately claimed that the scientists didn’t study hamsters. Therefore, the study was incomplete. Researchers then exposed hamsters to high levels of nicotine and concluded that there was a relationship between nicotine and cancer. The spokesmen immediately claimed that the scientists did not study prairie voles. And on an on, and the tobacco companies successfully delayed warning labels on cigarette packs for decades.
You, Kim, are no different from a tobacco company spokesman.
Land of no turn signals says says
Much cheaper 4 years ago.Just saying
Nephew Of Uncle Sam says
You also had a pandemic and everyone was staying home.
Sherry says
@ land. . . as usual, spoken like a true Fox/trump cult member. Facts/statistics/data/relativity/global point of view. . . who in the hell needs that, right?
JOSEPH HEMPFLING says
Sure they may be the cheapest according to what standard you use, and there are many, but they are not “food” in the healthiest sense but merely “food-like” substances, and come off an assembly line hence all the obesity and diseases we are suffering from as a result. Profits is the name of the game and damn the results including you and me. Not to mention the chemicals many of which are banned already in the u.K.
So if you really want to calculate the cost of our food, include health care costs. And you will get a new number, a more real one and a much much higher one !
Laurel says
Joseph: Good point. There are many food “deserts” in the U.S., and quality is a very real issue. I stay away from fast food places like they’re selling the plague…who knows…maybe… I watched a video today on the ingredients of Chick fil A sandwiches and sides, which I don’t like. Their “grilled” chicken paddy has 40+ ingredients, and the bun it’s on has 60+ ingredients! Cheap, bad oils and, well, read it yourselves. People are sometimes lined up around the shop, and fast food is no longer inexpensive. Many ingredients are purposely added for the addiction sake, while others are for shelf life. No thanks!
Ray W, says
Thank you, JOSEPH HEMPFLING, for pointing out the externalities to the food equation that exist all over the world.
This is the same issue for those who live downwind from a coal-fired electricity plant, or for those who live downwind from a steel plant.
What of those who grew up in the age of leaded fuels? Decades ago, the AMA road racing series included a stop in Orange County, California. My brother said that when he entered the backstraight he couldn’t see down to the next turn due to smog.
I recall as a teenager traveling to Balsam Grove, North Carolina. When up on the Blue Ridge Parkway, one could see stands of dead balsam trees from the road, killed by acid rain from factory pollutants expelled hundreds of miles away. Entire mountainsides were denuded of living balsams.
Cutting tops off of mountains to get at profitable seams of coal. Anyone flying over West Virginia can see the landscape scars.
We have a huge wastewater reservoir near Bradenton that holds polluted water from the old phosphate deposits that once were mined to make fertilizer. A number of years ago, the state had to spend millions to repair failing reservoir berms.
Then there are the nearly 60,000 “orphan” oil wells around the nation, some of them leaking oil after a concrete plug failed, which were drilled after the owner paid a too-small deposit into a state registry. The deposit was designed to be returned after the owner capped the well. Once some of the wells stopped producing, the companies would simply walk away from the wells, if it cost too much to cap.
There are many more examples. Each of my examples pertains to costs that companies do not consider in their business models.
Make of this what you will. Me? One of many answers to healthier fruits and vegetables is integrated vertical farming, including hydroponic farming. Fewer pesticides. Less water wastage. Controlled fertilizing of crops. Controlled environment. Specialized LED lighting that reduces electricity costs.
Many American cities have ample abandoned warehouse space that is ideal for conversion to stackable farming. As I have commented before, a northern city like Detroit has to transport in many fresh fruits and vegetables that cannot be grown year-round on local farms, often from far away, often from other countries. Empty warehouses converted to vertical farming can produce year-round and they can be a matter of blocks or short miles from community distribution points such as grocery stores.
My older son and his girlfriend are vegan. Years ago, they experimented with integrated closed-loop backyard hydroponic farming. They got excess leafy greens and vegetable waste once a week from a whole foods grocery and mixed it with shredded newspapers in bins that housed earthworms. The earthworm droppings were fed to fish that excreted uric acid, or ammonia, which is a natural fertilizer. The greens, bean sprouts, tomatoes, and vegetables were delicious, and the fish appeared to thrive and grow, but the process took a lot of effort, and they eventually gave up on it.
Sherry says
Hello Joseph. . .
Yours is a truly excellent comment! It would be very interesting to see some comparative statistics regarding the costs of health care related to the poisonous/cancer causing “highly processed” imitation food stuffs consumed by the majority of US citizens. And, I don’t mean only in “fast food” joints.
The “government required” labels on processed food found in “all” grocery stores read like a long list of toxic goop. . . used to grow and preserve what we consume. The trouble is, few people bother to read those labels or cook from “scratch” anymore. Actually, to the younger generations, “cooking” is defined solely as popping something into the microwave. . . and, that often includes even the “better?” restaurants.
Pogo says
@Ray W. (and DaleL) — you too, Mr. Tristam
Thank you for keeping the lights on.
Concerning Publix’s net, I wonder what proportion is derived from alcoholic beverages and pharmaceutical sales.
Cheap bread and circuses… and still it is true — there’s no free lunch.
Laurel says
Pogo and the aforementioned gang: Go to YouTube and look up “The Biggest Secret in Grocery Stores is About to be Exposed” by Frugal Recipes. It does a really good job explaining how the marketing of products uses psychology to get us to spend more, often more than we intended. Much of it we are aware of, but not all.
I’ve been shopping at our particular Publix since it opened, and even though it’s a small store, they periodically change things around so I find myself, suddenly, walking the *wrong* isle looking for a known product. Also, the once inexpensive LaCroix cases of water, became very expensive, and now, advertised frequently as a deal when you buy two cases, you get one “free.” The video shows several tricks of the trade, including how to intentionally confuse the customers.
Lots of tricks up their sleeves.
Lance Alred says
On December 16, 1773 colonists threw a bunch of tea belonging to the East India Trading company into the harbor. Britain had raised the tax on tea. Even with the tax increase, East India Tea was still the cheapest tea that could be bought in markets. Principles matter.
Instead of the article addressing:
Causes of inflation
Increased regulations
Policies aimed at devaluating our currency
Illegal Immigrations costs
We get, “feel good about it! We’re still cheaper than everywhere else!” Articles?
It must be desperate times at the DNC!
What’s next, articles touting “corporate greed”? You know, the articles that blame corporations s and call for taxing them so they may ,”pay their fair share!”. These woeful articles that ignore business and corporations are tax COLLECTORS, not tax payers.
Ray W, says
Hello Lance Alred.
You already know the causes of inflation. The primary cause was worldwide disruption triggered by the pandemic. The secondary causes include in large part the $2.9 trillion in unfunded stimulus money signed into law by former President Trump, followed by the $3.0 trillion more in unfunded stimulus money signed into law by President Biden. Trudenomics triggered Trudenflation.
You already know that smart regulation improves the economy and stupid deregulation harms the economy. The hard part is knowing the difference.
You already know that other nations’ currencies lost value against the dollar since the post-pandemic economic recovery in America began after the worst of the pandemic disruption. For a few years now, the dollar has been the strongest currency on the planet.
You already know that the costs of immigration are statistically significantly less than the benefits they bring to the economy.
Sherry says
On Payroll Taxes:
In France, the average single worker faced a net average tax rate of 27.5% in 2023. In the UK, while those with much lower incomes pay a lower percentage, the amount over the £50,270 threshold is subject to the 40% tax rate. Those taxes allow their health care costs to be much lower than ours. The health care in France and some other countries is superior to the care in the US.
Think about that. Trying to compare total costs of living from one country to another is essentially “apples to oranges”.
Here in Morocco, the cost of everything is relatively quite inexpensive. . . but, the wages are very low. Still, all the people we have met are very happy. They say it is because they have a “good king”. They are extremely kind, gracious, peaceful and welcoming. They have a powerful spirituality and are extremely kind to one another. . . not just to tourists.
On Guns: Gun laws here are reasonably restrictive: Those who wish to possess firearms must obtain a specific license according to the type of firearm, with the requirement that the applicant for a firearms possession license be of legal age, enjoying their national and civil rights, possessing physical and mental capabilities, and having a clean criminal record,” reads the new law. Morocco has a low crime rate and less terrorist threat than most European and American countries. Moreover, it is better ranked than Greece, Italy, France and the United States, which occupy respectively the 11th, 13th, 14th and 15th place of the top 20.
Dennis C Rathsam says
Under president TRUMP, the economy was 1.4%, interest rates were 3%, gas was $2.00 a gal, car insurance was 39% cheaper, and to top it off groceries are were 25%, cheaper. I don’t give a ratts ass about other countries! I live in America, the greatest country in the world, we were prosperous, and had peace in the Middle East. Due to TRUMPS TAX cuts, we had a little extra in our take home pay! After 3/3/4 years of total incompitance, 2 new wars, and millions of invaders allowed to enter our country, only to have them rape & murder our girls. 76% of Americans say the country,s going in the wrong direction. Let’s all give thanks to the BIDEN / HARRIS administration for making all this possible.