It’s not the supplier “bleeding them” the supplier has the exact same problem the restaurant has, inflation, if they don’t raise the prices they go bankrupt. It’s a vicious cycle of everyone raising prices not to go bankrupt which causes everyone else to do the same.
Comment on Shrinkflation is out of control
bobs_monkey@lemm.ee 2 years agoMore than likely their suppliers are bleeding them, a lot of restaurants in my town are dealing with the same shit
just_the_ticket@sh.itjust.works 2 years ago
some_guy@lemmy.sdf.org 2 years ago
If you don’t think suppliers are using inflation to justify robber-baron price hikes, I guess you missed the part where companies are posting record profits.
BraveSirZaphod@kbin.social 2 years ago
Inflation drives all the numbers up. If money inflates to half the value but you maintain the same profit margins, you'll make record profits despite the finances having functionally remained exactly the same.
Workers are also making record wages. It doesn't mean much if you don't consider how much the money is actually worth, as we've all been discovering over the last few years.
variants@possumpat.io 2 years ago
so why not just lower the profit margins? also give me some of them record wages please, all I got was a bottle of champagne for all the work weve done and record profits but also raises in pay are frozen because of the turbulent times
grue@lemmy.world 2 years ago
DarkWasp@lemmy.world 2 years ago
Workers are not making record wages, maybe CEOs and the upper middle class are but nobody else is.
SCB@lemmy.world 2 years ago
I work for a packaging supplier and inflation is hitting us hard.
Perhaps the people whose job it is to know shit a actually do know shit
drphungky@lemmy.world 2 years ago
I’m an inflationary economist and I feel you, man.
DrQuint@lemm.ee 2 years ago
People will just tell you “Ah, that’s the excuse they gave you to not raise you amt hing the inflation”.
And we won’t and can’t know who’s right until we know who you work for and what’s their past and current financial output.
drphungky@lemmy.world 2 years ago
This concept of greedflation has been disproved in recent meta-analysis. It should probably die. I’ll copy paste a comment I wrote in some other thread analyzing it.
I think everyone should probably listen to this great report from NPR that dissects this issue. The Tl;dr: is greedflation is not really a real thing.
The deeper answer to your question of, “can one party increase prices in a market?” is sort of basic economics, and the answer is, “Usually, no.” In a competitive market, the answer is no. In a monopolistic market (meaning one company controls most of the market, think like Google with browsers) with no government oversight, the answer is yes. Things get complicated when you add in government regulation or oligopolistic markets (markets where only a few players control the market). In those cases, it depends on how strong government regulations on price-gouging are and any anti-monopoly or anti-anticompetitive practice laws are, and also depends on how oligopolists behave. Sometimes, particularly in industries with few big players, the big players will make the same decisions independently. If they do this cooperating it will usually violate antitrust laws, but if they both decide they’ll be better off say, not paying workers as much, or charging super high markups, them that can happen. A lot of economic research shows that kind of “tacit collusion” happens in real life, like in the oil and gas industries. But other times oligopolies will behave very competitively, only uniting through lobbyist trade groups if at all (think Microsoft and Amazon in cloud software).
So that’s the facts, but here’s my economic musing: The reason it feels like greedflation is a thing is a combination of factors:
- Inflation was very real, and very salient.
- Corporations (as mentioned in the NPR piece) crowed about their “record profits” in the short term, and also mention them when they are absolute record profits, not just record profit margins (something not mentioned but very real - a company can make twice as much money but also have spent twice as much, making way “more” money but with identical margins)
- In the US at least, we are seeing the highest numbers of industry consolidation and monopolies/oligopolies since the Gilded Age, so it feels like companies should be able to raise their prices if they want to.
- Media coverage and online spaces have become extremely polarized, so “corporations bad” is a very easy refrain to find if you’re watching or reading anything remotely left-wing, and it has been parroted by many democratic politicians as well, because it scores cheap and easy political points (also, and this is just my opinion, it helps vilify corps more in the public eye to help get more support for better antitrust legislation and enforcement, the actual end goal. I don’t think senators like Bernie Sanders don’t actually understand what’s going on with profit margins, I think they’re using it to generate political will, but that may be my own bias creeping in).
Agent_of_Kayos@lemm.ee 2 years ago
Huzzah for our current system of capitalism that insists a company is only doing good if each quarter has record profits. What’s bad with doing “good enough?”
dan1101@lemm.ee 2 years ago
You’re getting downvoted but the suppliers have suppliers too, and even if it’s a farm-to-table thing the farms have supply costs.
Kichae@kbin.social 2 years ago
Yeah. One of my favourite restaurants closed a couple months ago because they just couldn't justify charging more for food, but their suppliers sure could.