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Comment by legitster | Hacker News Reader

I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg?

> They didn't have the pricing power/their customers didn't have the tolerance for rising prices/

Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addressed and not worry too much about retailers. They are just doing marginal pricing. If there is a shortage on eggs, it's better for everyone that they price eggs so they stay on the shelves than to price them as if nothing is happening and then people panic because they can never find them anymore.

The profits may be up, but the revenue is still down overall.

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> Or a magic 'greed' button that they refused to hit before now.

There's some empirical evidence from Australia that this is exactly what they did. Also an island nation that heavily imports food

https://www.theguardian.com/business/2023/feb/24/an-economic...

there's also "empirical evidence" that minimum wage laws don't lead to unemployment, that doesn't make it true

The linked study didn't really make that claim. All it really showed was that only a small portion of inflation was returned in the form of wages. It didn't really attempt to figure out the reasons for the profits.

I don't know why people get so hung up on this though: If you have less stuff to sell, and fewer employees to sell it, your profit margins are going to be higher! That doesn't mean though that you are maximizing your revenue potential. Which is probably why despite all of these reports of "record profits" you are not seeing exploding stock evaluations.

Also, it doesn't hurt that inflation is always going to be favorable to retailers. You buy inventory at the pre-inflation price and sell it at the post-inflation price. Even if you just price to keep up with inflation, you are going to report "record profits" every quarter just by nature of inflation.

>I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg?

I'm not sure this can be approached from a rational examination of economic premises alone. You raise good questions. However political economy also should be considered.

Let us imagine for a moment that this narrative is being advanced to deflect from government largess in the economy. Under this scenario court economists have an interest in protecting the regime, while the regime and academic institutions generally have a symbiotic relationship. If these incentives make sense, the narrative can be better understood in this political context.

Unfortunately this hypothesis suggests that there is very little we can say here without this discussion devolving into the regular flames we see on this topic.

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