Supermarkets are the public face of inflation. Every time we go shopping, we are reminded that just about everything costs more than it did before Covid. And shrinkflation, once subtle and insidious, has become blatant. A standard chocolate bar is now what used to be called “fun size”. A natural response, particularly for politicians seeking to divert attention from themselves, is to blame greed and monopoly power.
Explanations based on greed are rather naive. Corporate executives are paid by shareholders to be greedy – that is, to maximise profit subject to a somewhat hazy concept of “social licence” regarding the treatment of customers, employees and other stakeholders. And there is no reason to think that Coles and Woolworths were any less greedy before the arrival of the pandemic than after.
