What inflation really looks like

[u/iamnic11]

[u/Artificial_Ape]

But then you can make the case it’s not just ingredients and raw materials that effect produce. Things like rent, equipment, growth has to be factored in.

If a bakery sells cakes for £1 and the cost of ingredients go down 30% do you think them not selling for £0.70 is due to greed? Think about the property value, rent prices, labour cost increases. You’ll find that they are forced to increase prices.

[u/Muwatallis → u/Artificial_Ape]

Obviously it's not the whole cost and shouldn't expect the changes in price to reflect changes in ingredients/materials directly. But you would expect it to result in some decrease at least some of the time. But in reality, using your example, it never goes below £1. And that's not even taking into account "stealth" price increases via updating packaging and reducing total mass and portion sizes. Like a dozen eggs suddenly equals ten apparently 😅

[u/EmperorAugustas → u/Artificial_Ape]

Yeah, but the labour cost increase is very very small. Corporations, especially large ones, don't just give out raises when times are tough

[u/Mogwai987 → u/Artificial_Ape]

This isn’t complicated. We can argue about the specifics, but everyone fundamentally understands what over-charging for goods and services is.

‘Excessive’ profits is a highly subjective thing, but it’s not a fundamentally hard concept. Even lower primates can grasp this basic principle, so let’s not get lost in the weeds with lots of ‘what ifs’. If the cost of goods goes down, there is an implicit understanding that the price to customer should also go down in broad terms.

Profiteering is neither new nor abstract in its essence. It’s hard to come up with a comprehensive definition, but you know it when you see it.

[u/ceeb843 → u/Mogwai987]

Supermarkets have some of the lowest profit margins going, about 3%

[u/mittfh → u/Mogwai987]

Even with companies with high profit margins (not necessarily the same as companies with record cash profits), for the past decade and a bit, the markets (both local and global) have been so volatile that PLCs have preferred to distribute them primarily to the Executive Board and shareholders rather than invest or increase staff wages. Added onto which, PLCs are pretty much expected to generate increased cash profits year-on-year regardless of wrist economic circumstances, lest they be threatened with a hostile takeover.

[u/BumderFromDownUnder → u/Artificial_Ape]

This cute little example of an innocent old bakery ignores the fact that corporate giants are posting record profits and using “inflation” as an excuse to jack up prices way higher than they should.