Grocery prices are 25.6 percent higher than they were in February 2020. The food companies set to serve you this week are earning more profit per dollar of revenue than at any point in the last decade. And some of them have already been testing technology that would charge you more for the same carton of eggs than the person standing in the next checkout lane, based on your income, your zip code, and the data profile they quietly bought about you.
What the Profit Numbers Actually Show
The Federal Trade Commission spent two years studying the grocery supply chain and published its findings in March 2024. The headline number: operating profits at food and beverage retailers rose from $14 billion in 2019 to $25 billion in 2023, a 79 percent increase. Revenue was running more than 7 percent above costs in the first three quarters of 2023, the highest margin recorded since at least 2015, when it peaked at 5.6 percent.
The FTC's conclusion was direct: some firms "used rising costs as an opportunity to further hike prices to increase their profits." Costs went up, then prices went up more, then the costs came down a bit, and the prices stayed up. That stickiness is where the extra $11 billion in annual profit lives.
Meanwhile, food at home is still rising. The Bureau of Labor Statistics reported in June 2026 that the food-at-home index is up 2.7 percent year over year as of May, and the USDA projects grocery prices will rise 3.2 percent through all of 2026, faster than the 20-year average of 2.6 percent. For a family spending $800 a month on groceries, that is $25 extra every month, $300 a year, without buying anything different.
The Market Structure Behind the Price Gouging
The ability to hold prices high depends on the ability to avoid competition, and that ability grows with consolidation. In 1990, the four largest grocery chains controlled roughly 15 percent of the U.S. market. By 2019, according to the FTC, they controlled more than 30 percent. Today, Walmart alone holds 25.4 percent of grocery market share nationally, with Kroger at 9.2 percent behind it.
Research on merger concentration is blunt: industries that consolidate down to six or fewer significant competitors see price hikes in 95 percent of cases. The blocked Kroger-Albertsons merger would have combined the second and third largest chains. Federal judges ultimately stopped it, but the attempt itself signals how aggressive consolidation pressure has become.
The Technology That Can Make It Worse
In 2025, a Consumer Reports investigation found that Instacart was running a pricing experiment using artificial intelligence to charge shoppers different prices for the same items. The variance reached as high as 23 percent between customers for identical products. The FTC opened an investigation and Instacart shut the experiment down, but the infrastructure that made it possible is spreading.
Electronic shelf labels, already deployed by Walmart and Kroger, can change prices remotely in seconds using algorithms that factor in weather patterns, time of day, and, potentially, what your loyalty card data says about how price-sensitive you are. The FTC found at least 250 businesses had adopted some form of surveillance pricing strategy. None of this is illegal yet.
On February 12, 2026, Senators Ben Ray Lujan (D-N.M.) and Jeff Merkley (D-Ore.) introduced the Stop Price Gouging in Grocery Stores Act of 2026, which would ban surveillance pricing in food retail, require disclosure of facial recognition technology use, and prohibit electronic shelf labels in large grocery stores. Senator Lujan, ranking member of the Senate Agriculture Subcommittee on Food and Nutrition, framed it plainly: "Congress must act to ensure that technologies are being used to improve the lives of Americans, not increase their grocery bills."
At an April 2026 Senate Commerce Committee hearing, Senator Jacky Rosen pressed FTC Chair Andrew Ferguson on why the agency closed its surveillance pricing comment period three months early. Ferguson confirmed the FTC "will not hesitate to use its law enforcement authority" on algorithmic pricing, but noted the agency's first enforcement action on the issue came only after Instacart's experiment became public.
"There should be one price for broccoli for all of us. Not some of us pay more. No one will pay less, I guarantee you on that one." -- Sen. Jacky Rosen, Senate Commerce Committee, April 15, 2026
What a Working Grocery Market Would Look Like
Price transparency and competition enforcement are not radical ideas. They are the baseline conditions a functioning market requires. The countries with the most stable food costs tend to be the ones that enforced merger review early, required price posting at point of sale, and gave regulators the authority to act before one company held a quarter of national grocery sales.
The Stop Price Gouging in Grocery Stores Act sits in committee. The Kroger-Albertsons ruling showed federal courts will enforce merger law when the evidence is clear. The FTC has the statutory authority to pursue algorithmic price discrimination under Section 5. The tools exist. What is missing is the political will to use them before the 7 percent margin becomes 10, and the 23 percent price gap between customers becomes the standard operating model.
Operating profits up 79 percent in four years. Grocery bills up more than 25 percent since the pandemic. Four chains controlling nearly half the market. Those three facts together describe a structural problem, and structural problems require structural fixes.
Sources
- Lujan, Merkley Introduce Stop Price Gouging in Grocery Stores Act of 2026 -- Sen. Ben Ray Lujan, February 12, 2026
- FTC Releases Report on Grocery Supply Chain Disruptions -- Federal Trade Commission, March 2024
- Consumer Price Index Summary, May 2026 -- U.S. Bureau of Labor Statistics, June 2026
- Rosen Presses FTC Chair on Surveillance Pricing -- Sen. Jacky Rosen, April 21, 2026
- What Was Up with Grocery Prices? -- Federal Reserve Bank of New York, July 2024
- Food Price Outlook Summary Findings -- USDA Economic Research Service, 2026
- S.3892 -- Stop Price Gouging in Grocery Stores Act of 2026 -- Congress.gov
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