Private equity and your grocery bill

Groceries are complicated. And I know this series is all about exposing private equity, but they aren’t the sole reason your prices are going up. Groceries are 35% more expensive today than in just 2019, and it’s not one single factor - there’s agricultural labor shortages, higher fuel costs, tariffs, the list goes on.

But here’s where private equity does come in. Between 2015 and 2019, 7 major grocery chains have filed for bankruptcy. All 7 were acquired by private equity, and run into the ground.

Then, on the complete other side, there’s massive conglomerates like Albertson’s who are owned by Cerberus Capital Management, a private equity group based in New York. Albertson’s and Kroger were actually going to merge, and they would have been 14% of the grocery market if they hadn’t been blocked by the FTC.

You might see what I’m getting at, but there are two forces at play, both driven by private equity. On the one hand, private equity is destroying some chains. But on the other, they’re trying to and at times successfully consolidating. But what both of these forces do combined is they turn what should be a competitive free market into an oligopoly. And when such a small number of firms controls something so essential to our lives, we are completely at the mercy of those firms.