As food prices soar to historic highs due to inflation, American consumers are not getting relief from grocery stores as they have been offering fewer discounts since the pandemic, the Wall Street Journal reported.
Food producers generally support retailers with discounted prices, which allows grocery stores to offer lower prices to consumers — typically paying back 15 to 18 percent of costs to retailers, according to Jim Hertel, an executive at a market research firm.
However, as food producers deal with increased manufacturing costs, labor costs, supply chain issues, drought and flooding, and disease, they are forced to jack up their own prices and are at a reduced capacity to offer discounted prices.
The burden of offering discounts to consumers is then shifted to grocery stores, who were already paying more to producers.
As a result, retailers are offering fewer discounted prices than they were before 2019.
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