Greedflation and Grocery Retail Conduct Evidence from Commodity-Like Product Markups

Recent inflationary pressures have sparked widespread allegations of “greedflation”—the notion that firms have exploited cost shocks to raise prices beyond what is justified by fundamentals. Among the sectors most frequently accused are grocery retailers, particularly in the pricing of essential, commodity-like consumer goods. This paper empirically investigates these claims by testing for the presence of coordinated or collusive pricing behavior among grocery retailers during a period of rising input costs. Using detailed store-, product-, and consumer-level data, I estimate a structural demand model and use it to recover mark-ups and test firm conduct. I examine whether price responses to commodity cost shocks are consistent with competitive pricing or indicative of joint profit maximization. The findings indicate that, for several product categories frequently highlighted in the media, pricing behavior is more consistent with competitive conduct than with collusion. Overall, despite rising prices and profits, the evidence indicates that pricing behavior remains consistent with competitive conduct, underscoring the importance for policymakers to account for demand conditions and cost pass-through before attributing inflation to coordinated market power.