It's unfortunate that the word monopoly is losing it's meaning. Formerly, it meant a business that had an overwhelming or total share of the entire market, plus high barriers to entry. Now it just means a big business, or the only option in my neighborhood.
Supermarkets aren't especially profitable these days, and downward pressure on suppliers ultimately serves consumers anyway. The grocery business is very competitive, with incredible price transparency and low margins.
> It's unfortunate that the word monopoly is losing it's meaning. Formerly, it meant a business that had an overwhelming or total share of the entire market,
You're just describing the most extreme and dysfunctional aspect of a phenomenon that comes in shades of gray.
> plus high barriers to entry.
That's not exactly a requirement. A sufficiently powerful monopoly can generate its own barriers to entry (e.g. it can use its war chest to lower prices to an uneconomical level to drive a potential competitor out of business, and the threat of that can keep a competitors from even trying).
> Now it just means a big business,
It means big business that abuses its market share to make even more money due to a lack of real competition.
> or the only option in my neighborhood.
And those an be a legitimate monopoly, even by your above definition. It's all about how you describe the market.
IIRC, in the Grapes of Wrath, there's a company store that's a monopoly, and the proprietor says as much: his prices are unfair, but the transportation cost to shop at another store forces his customers to shop with him.
While monopoly originally referred to a single company having an overwhelming share of the market, its colloquial use refers to any company that has enough market share to abuse its position to harm customers. This is just because it's easier to convey the point by saying monopoly than deal with all the dumb questions that get brought up by using oligopoly.
During covid, while every corporation whined how tough times were (and often they really were), retail sellers in Europe like Tesco had record profits. Elevated prices, excuses about supply chain, less workers on the fields etc. Their profits went through the roof, year after year.
Rewind to 2024, prices are even higher, their profits are still stellar. I have hard time feeling any sympathy towards them.
Its almost as if they somehow, big boys behind closed doors, made together some shady deals about overall prices (with which smaller guys can't still compete ie due to economies of scale or massive negotiating power). No, that can't happen in 2024, almost pretty sure about that.
Nominal profits have no place in this discussion. Only profit margin, and grocery businesses have profit margins of 2% or maybe 4%. Tesco has a less than 4% profit margin (they only list operating margin, I didn’t bother to calculate profit margin, but it must be lower), and the margins have not been increasing. Which means Tesco’s costs are increasing, necessitating Tesco’s price increases. Otherwise Tesco loses money.
If you think you can run a better business on sub 4% profit margin, you are welcome to throw your hat in the ring. But it really is an achievement of modern technology, logistics, and management to enable to get the amount of food, from all over the world, in consumer’s hands, all year round, at such low profit margin.
This comes at the expense of quality and variety though. A market economy will not flourish if there are only a few big players. We need small businesses to be able to innovate.
That's not an iron law, though. Some consumers will always choose based on price, but for others, it is a function of experience. I, for one, am happy to pay a bit more for a higher-quality product, but my experience tells me that a slightly higher price is indicative of marketing rather than product quality.
So why doesn't anyone fill that niche? Perhaps in part because the market is so consolidated. There's little incentive for the small handful of major players to cannibalize their own products.
So we end up largely with two options: the cheapest version of the thing that is possible to manufacture, and an extremely high-quality artisan product costing multiple times as much.
Grocery stores sell multiple quality products (generic/branded), and you have various quality of inventory based on the market the retailer is targeting. For example, Whole Foods/local higher end store, down to Costco/Trader Joes/Kroger, down to Aldi/Winco/etc, down to Dollar General.
Then you also have lower priced stores operated by immigrants that attract more price sensitive immigrant diasporas.
But broadly speaking, it would reflect the disposable wealth gap between buyers. With a widening income/wealth gap, I would expect there to only be a few viable markets to cater to, maybe even only 2. The source of the “problem”, however, would be the wealth gap, not the stores. The stores are a reflection.
Another issue is also technology and instant communication making it more convenient and cheaper to use fewer vendors. Shopping and checking prices is work.
If someone can drive to one big box store and get almost everything that need, they will choose to do that.
And the more we have big businesses in charge of the economy, the more they will suppress wages, and the more people will have to buy primarily based on price.
Supermarkets aren't especially profitable these days, and downward pressure on suppliers ultimately serves consumers anyway. The grocery business is very competitive, with incredible price transparency and low margins.