Where Shopping Is a Bummer? Florida Shoppers Are Reeling From Grocery Price Hikes

Miami natives with fond memories of accompanying Mom and Dad to where "shopping is a pleasure" and heading straight to the bakery counter for their free chocolate-chip cookie are now grown up, buying their own groceries, and facing a frustrating reality: increased spending for less food.

"At Publix, shopping just for myself, getting what I normally do, it went from $110 to $180," says Miami native Danny Turkel.

As if outgrowing the free cookie wasn't bad enough.

"It bums me the fuck out," says Marlee Gleiberman, another Miamian. "Growing up, Publix was our staple for groceries. Now that I'm an adult, Aldi is the only option."

In March, Publix released its annual earnings results, announcing that "net earnings for the fiscal year ended Dec. 30, 2023, were $4.3 billion, compared to $2.9 billion in 2022, an increase of 49 percent." The earnings blastoff set the internet ablaze with shoppers expressing frustration that their groceries remained overpriced while the company's profits swelled.

Some locals say they've left Publix behind to shop at lower-cost stores, and with limited options in the discount grocery market, they are making multiple stops when doing their shopping.

"I've been doing longer drives to Trader Joe's and hitting up my local smaller chains for cheaper groceries," says Miami native Krystal Millie Valdes.
Publix did not respond to New Times' request for comment. The grocer says in its marketing materials that its mission "is to be the premier quality food retailer in the world."

"To that end, we commit to be passionately focused on customer value, intolerant of waste, dedicated to the dignity, value, and employment security of our associates, devoted to the highest standards of stewardship for our stockholders, and involved as responsible citizens in our communities," Publix states.

Miami, Where Shopping for Groceries Is a Mission

Shopping for groceries in Miami has officially become a mission, and locals' dedication to finding bargains is warranted. Along with rising housing costs putting Miami in a financial chokehold, grocery prices are up 30 percent since 2019 — and it's been a boon for large grocers across the board, not just Publix.

The Federal Trade Commission (FTC), the agency responsible for antitrust law enforcement and consumer protection, released a March report titled "Feeding America in a Time of Crisis," which found that large grocery chains' price hikes kept their profits ballooning despite pandemic-era supply-chain gridlock, product shortages, and worker wage increases. (The report did not mention Publix by name and noted that the analysis tackled the retail food market as a whole.)

"As the pandemic illustrated, a major shock to the supply chain can have cascading effects on consumers, including the prices they pay for groceries," FTC Chair Lina Kahn said in a statement. "The FTC report examining U.S. grocery supply chains finds that dominant firms used this moment to come out ahead at the expense of their competitors and the communities they serve."

University of Massachusetts professor Isabella Weber posited that large grocery store chains contributed to inflation — which reached a 40-year high of 9 percent in 2022 — by exploiting supply chain bottlenecks and coordinating price hikes with one another to increase profits. Weber referred to the phenomenon as "seller's inflation" — a mainstream concept at this point.

According to a Bloomberg analysis, nonfinancial corporate profit margins were the highest they'd been in the previous 70 years in 2021, smack-dab in the middle of the pandemic.

Nabit Ahmed, the director of economic justice at Oxfam America, told Vox, "During the pandemic alone, billionaires involved in the food and agribusiness sectors — just those billionaires — increased their wealth by at least $400 billion. We've seen 62 new food billionaires created during the pandemic."

While consumers might have bought into (pun intended) higher prices during the height of the pandemic when people were fighting over a roll of toilet paper, sky-high food prices are now harder to swallow, given that inflation has dropped 6 percent since 2022. Other industries like clothing and sporting goods have lowered their prices to at or near pre-pandemic levels. Even gas prices have dropped to some extent.

And perhaps most relevant, the cost of agricultural commodities from food suppliers is down from the pandemic peak.

So Why Are Grocery Bills Still So High?

Groundwork Collaborative, a progressive economic research group that released a February report on grocery inflation, attributes the phenomenon not just to grocer greed but to food-supplier profiteering. 

"Corporations continue to keep grocery prices high as supply chain snarls loosen, prolonging the squeeze American families feel at the checkout line," said Elizabeth Pancotti, strategic advisor for Groundwork and a co-author of the report. "As long as these companies can use the next crisis as an excuse to hike prices, food affordability will remain a top concern."

If you've ever brought up the high cost of groceries to someone who has replied something like, "Oh, it's just the market doing its thing," or, "It's the pandemic economy, that's just the way it is," then you know what a consumer conditioned to accept price hikes sounds like.

Executives in the consumer goods industry are aware of this mindset pliability and openly cite it when discussing cost hiking. Groundwork Collaborative found ample instances of executives on earnings calls discussing consumer complacency and how it can be leveraged for profitability.

Procter & Gamble, a conglomerate whose goods you surely find at big grocery chains, announced last year that it would start charging more for several staples like diapers and toilet paper. P&G chief financial officer Andre Schulten told analysts toward the end of the pandemic, "As we take pricing, we see a lower reaction from the consumer in terms of price elasticity than what we would have seen in the past."

And Hostess' then-CEO Andy Callahan explained in a March 2022 earnings call, "Consumers get used to it. When all prices go up, it helps. So there's a relative pricing thing that I think every food business has experienced."

According to the FTC, grocery store profit maximization on top of increased supply chain costs only worsened the predicament for cash-strapped consumers. Though the FTC took no punitive action, it said its March report cast doubt "on assertions that rising prices at the grocery store are simply moving in lockstep with retailers' own rising cost" — and that the findings "warrant further inquiry."
In February of this year, the FTC sued to block Kroger's $24.6 billion takeover of rival grocer Albertsons, citing concerns it would lead to a monopoly.

But with just six grocery chains controlling half the market, competition is already limited.

Publix, the 800-Store Grocery Gorilla

In Florida, Publix dominates the grocery market, and it intends to continue expanding. The chain opened its first store in Winter Haven in 1930 and in the decades that followed, it innovated the Florida grocery landscape with air-conditioned stores and wide food-product selections. The chain now operates more than 800 locations in the Sunshine State and is deploying a large portion of its capital to complete major store upgrades.

New Times recently reported that the City of Coral Gables approved a "58,302-square-foot Publix supermarket, a 2,500-square-foot Publix liquor store, and two floors of parking."

How willing will Gables residents be to drive to smaller grocers once the new, sprawling Publix has been erected? What happens when choices keep dwindling and people — living busy lives and needing to get in their weekly groceries — drive by big green Publix signage and a welcoming arch?

It's no secret that convenience and malleability often trump informed resolve in America. Grocers and supplier conglomerates know this and use that knowledge to maximize profits.

To be fair, large grocers have historically tight profit margins, often 3 percent or less. Popular chains such as Winn-Dixie and A&P filed for bankruptcy in recent years, saddled with debt.

According to Barron's, Publix has managed to outdo its competitors by a long shot on net margins. "Publix's net margin is 7 percent, against just over 2 percent for Kroger. Publix earned more on its $57 billion in sales last year than Kroger did with $150 billion in revenues," the Dow Jones-owned publication reported last month.

What, if anything, can be done from the top down to help consumers deal with bloated food costs?

President Joe Biden, whose approval rating has plummeted amid heavy inflation, has pushed to expand the Supplemental Nutrition Assistance Program (SNAP) for low-income Americans and attempted to soothe supply chain stresses to bring down grocery prices.

But Elizabeth Pancotti, a co-author of the Groundwork Collective report, told the New York Times, "You have this huge chunk of people in the middle who are low-income, but not impoverished enough to get SNAP benefits. At the end of the day, it just doesn't reach enough people."

That's where many Miamians find themselves. The lack of affordable housing, rising insurance costs, and otherwise high cost of living in South Florida drain the bank accounts of countless residents, even those who earn what was, just a few years ago, a middle-class wage. 

There may be some light at the end of the tunnel as wages began to outpace inflation in 2023.

The Biden Administration and the FTC are also considering reinforcing a 90-year-old law that requires suppliers to offer the same terms to various retailers to which they are selling, regardless of the buyers' size and clout. Suppliers often cut a deal to big retailers who account for most of their sales, leaving higher prices for smaller retailers, who then have to charge their consumers more.

In a Forbes article, food-policy contributor Errol Schweizer noted that for "just $80 billion or so," Congress could "make fresh produce free."

"Sounds steep but would still be a lot less expensive than the bipartisan $150 billion increase in federal military spending since 2019," wrote Schweizer, whose résumé includes a seven-year stint as vice president of grocery for natural-foods giant Whole Foods.