Greedflation

How It Works

Greedflation (also called "sellers' inflation" or "profit-driven inflation") emerged as a popular explanation during the 2022-2023 inflation spike when corporate profit margins in the food industry reached multi-decade highs even as companies cited cost pressures. The evidence is mixed and hotly debated. Proponents point to data from the Federal Reserve Bank of Kansas City showing that corporate markups in the food industry rose roughly 7% above trend during 2021-2023, and that grocery chain profit margins doubled from 1-2% pre-pandemic to 3-4%. Skeptics counter that these margin increases were temporary, driven by inventory gains (buying low, selling high during rapid price changes) and that competition has since driven margins back toward historical norms. Burgernomics is useful for this debate because it tracks raw ingredient costs, not retail prices per se, the gap between BLS average prices and actual shelf prices at specific retailers reflects the retail margin. The FTC launched a formal investigation in 2024 into grocery pricing practices, and several European countries have imposed windfall taxes or price controls on food companies. Regardless of the debate, the term has entered the popular lexicon and reflects genuine consumer frustration with food costs.

Related Terms

• Food Inflation, The rate at which food prices increase over time, measured as a percentage change in the food component of the CPI, historically averaging 2-3% annually but spiking to 11.4% in 2022.
• Shrinkflation, The practice of reducing the size or quantity of a product while keeping the same price, effectively raising the per-unit cost without an visible price increase on the shelf.
• Input Costs, The costs of raw materials, labor, energy, and other resources that go into producing a finished product, rising input costs are a primary driver of food price inflation.