Readers: Today's post covers a few follow-up thoughts and questions for readers from my Divorce Yourself From the False Reality of Your Grocery Store article from the other day. Be sure to read the original post before starting in on this one.
1) The other day's post talked about how grocery stores, because of their low profit margins, must capture profits when and where they can.
Guess what is one of the primary sources of incremental profits in grocery stores these days? Organic foods.
Roll this over in your mind for a moment or two: if organic foods generate considerably higher profits to your store, does the consumer get value in return?
2) You could consider grocery store pricing idiosyncrasies to be proof that my first-order and second-order foods framework for looking at food costs (that processed foods tend to cost more than simpler whole foods) is fatally flawed. [For an in-depth explanation of my thinking here and great ideas to save a ton of money on your food bill, see my article Stacked Costs and Second-Order Foods.]
A standard comment usually goes like this: "You claim that so-called first-order foods are cheaper and second order foods are more expensive, but what about wheat flour/couscous/quinoa (or any of several other foods that I think ought to be cheap but aren't)? How can things like this be allowed to happen?"
When I hear this, my first thought is to say nothing explains everything. No theory, no matter how awesome, will explain all the kooky one-off pricing decisions of your local store. You will always find certain food products in your grocery store that are expensive, when logic says they should be cheap. There are simply too many variables behind the scenes that affect the prices of consumer goods.
3) One of my readers, upset with how wheat flour costs more than heavily-processed white flour, had her own solution to the seemingly unfair pricing in her grocery store: she wanted to tax each step in the processing of all foods.
What's wrong with this idea?
It has a certain elegance. After all, wouldn't it be great if we could, by centralized government fiat, make an executive decision that would encourage consumers to buy healthy, unprocessed foods like wheat flour? Wouldn't that be for the good of society?
Long-time Casual Kitchen readers should be able to anticipate my answer. For one thing, I'd shudder to see the 3,000 page bill that comes plopping out of congress to impose that tax. And I don't even want to think about the nightmarish logistical problems of detailing and enforcing such a tax--not to mention the not inconsequential impact such a tax might have on our personal liberties.
The devil is always in the details.
Readers, share your thoughts and reactions!
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