Hacker News Reader

Comment by cogman10 | Hacker News Reader

There's a weird thing happening in the US where all the restaurant suppliers have consolidated. What that means is you likely won't see competitive prices anywhere else not due to scale but due to the input price being fixed regardless of who you are.

I believe McDonalds is still somewhat independent in it's sourcing. IDK about wendy's. But Burger King is absolutely just another Sysco reseller at this point.

That means a lot of the smaller burger stands end up just selling the same stuff as every other burger stand. Food that tastes a lot like my high school cafeteria did (hint, also Sysco).

The only real lever any food business can pull is in facilities and staffing. The price of the food is fixed and there's no real competition to be had.

View on HN

This is it.

and: true across the board, not just restaurants...

Yup, and I really hate it. Monopolies and oligopolies are really terrible in just about every way imaginable. Everyone that isn't an oligopoly gets screwed.

This is also simply the natural end state of free market capitalism. Every one of these giant businesses knows that by swallowing up smaller competitors they can ultimately improve their revenue without improving quality or actually innovating/competing.

Companies like sysco should have never been allowed to merge with other distributors and they should absolutely be broken up.

it's just incredible.

Internally, these huge corporations behave exactly the same as a good old fashioned USSR bureaucracy:

endless meetings where no work gets done

a huge class of bureaucrats (manager, senior manager, VP, senior VP, director, senior director ... what's next? commissar? secretary?) who don't actually do any of the line work and instead exist only to perpetuate a process

huge amount of process that does nothing for the bottom line or indeed for anyone at all

random party lines that you must accept or be fired (new director came in. Now we're doing a 30 minute velocity retrospective every week. you must attend, comrade!)

party language determined from on high, that changes once every 5 years (blockchain is our five year plan! huh? blockchain? no no, AI is our five year plan!)

party princelings who rise not on merit but purely on positional signifiers alone (Comrade, I know you've been a party loyalist for 25 years, but your senior director position is being given to a new princeling. He's 26 years old. He came from Stanford, and was on the forbes 30 under 30. They say he was a protege of Peter Thiel!)

and, most importantly: everyone at the bottom, who pays for all of it, and must take it completely seriously.

It's always wild to me when people talk about the efficiency of private industry.

There's not a private business on the planet that's super-efficient.

The difference is that unlike USSR bureaucracy, these corporations' continued operations depend completely on the decisions (buy or not) of customers who they cannot coerce -- so their feet are far more held to the fire of market reality than totalitarian regime leaders. They do not have the power to force people not to vote with their wallets (not to mention with their feet).

As frustrating and corrupt as our market economy is, the oppression under regimes like the USSR and East Germany was unimaginably worse.

That being said, yes -- we badly need another round of legislative reform like the Sherman Antitrust Act of 1890 and all the regulatory actions that followed.

> who they cannot coerce

If the market is a consumer need then yeah, these companies can coerce simply by being the only (or one of a few) options in town. Food, healthcare, and housing are all markets that appear to be narrowing which means increasing in their coercive abilities.

It's true that the USSR and East Germany were worse, but that had a lot more to do with the concentration of power into a strongman leader rather than the people. And, in fact, a major part of why West germany did so well wasn't really due to market forces, but rather due to the US spending ungodly amounts of money on rebuilding them (and Japan). The USSR was always pretty cash strapped. Especially since the only nations they could really interact with were nations under the USSR umbrella. Even other communist nations like China had pretty tense and often not friendly relations with the USSR.

In today's money, we dumped about $120B on West Germany. Just to put things in context.

In this day and age, that feels like something that is true in principle but not in reality. For food, the grocery store shelves are almost entirely stocked with brands owned by 10 companies, that have a combined revenue of $375 billion a year [1]. If you have a bad experience with DiGiorno pizza and boycott them, would you know you also needed to boycott Tombstone Pizza, California Pizza Kitchen, Cheerios, Tidy Cat, and on and on. If you wanted to actually boycott Nestle, how difficult would it be to maintain a spreadsheet of the literal thousands of brands they own [2]? Any issue with any brand is just absorbed by a thousand others. Any regional effort is absorbed by their global market. It isn't the USSR, but the idea that consumers can vote with their wallet just isn't the reality we live in anymore.

[1] https://www.the-independent.com/life-style/companies-control...

[2] https://en.wikipedia.org/wiki/List_of_Nestl%C3%A9_brands

This is fascinating take and makes SO much sense.

Fortunately it's not true. Sysco has 17% of the market according to Morningstar:

https://www.morningstar.com/company-reports/1327868-sysco-re...

Sysco isn't the only one, but it is one of the few.

If you start looking at the distribution centers of these companies and the competitors, you get a pretty clear picture of how concentrated things are.

The drop off for the distribution centers of the top 3 is stark. [1]

[1] https://abasto.com/en/advice/food-distributors/

Reply on news.ycombinator.com