Around here, Roma tomatoes which typically come from Mexico are $1.29/lb, other heirloom varieties are $1.99/lb or more. Years ago, my value engineering analysis of the tomato situation pointed to Roma as the optimal solution.
Of course, Safeway and Kroger may use the tariffs as an excuse to price gouge even more.
intercst
If the grocery business is a “price gouge” then as a consumer I’d take it any day across the whole economy. Kroger’s net profit margin is less than 2% and Albertson’s is under 1%. Much lower and the grocery stores would have to close.
DB2
Grocery stores have survived for decades on margins of 1-3%. The reason is because they have such high turnover. Of course, that assumes they can get the product.
I buy a car once every 10 years. I eat 3 times a day.
Any price increases due to tariffs will hit consumers fastest in grocery stores. Canary in the coal mine.
If your basis is solely on price per pound, you could be correct. More to tomatoes than just price and much depends on usage, i.e., sandwich, sauce, salad, etc., etc.
If you have the space and conditions, the cheapest and best tomatoes are home grown. Have been doing that for the past 7 years and there is nothing better.
I’m not even particularly interested in owning a home, and now you’re suggesting I get into farming?
intercst
At least buy them at a farmer’s market. Grocery store tomatoes taste very similar to cardboard.
What I’ve learned with the Roma tomatoes is that you need to let them ripen for about a week before you use them. Once they soften up, they’re fine.
intercst
Sure. But what’s the delta between the price at the Port of Entry and the price in the grocery store? There are lots of middlemen on the US side of the border that are adding cost to the product that won’t be subject to a tariff. (Antitrust lawyer Eric Stoller calls them “economic termites”) A 25% tariff at the port on the wholesale price may only add 10% to the grocery price. A savvy Kroger CEO could rely on the ignorance and innumeracy of the American people to gouge them for the full 25%. It’s what makes America an “exceptional” nation.
intercst
Ah, the grocer would add his profit margin to total cost, so a 25% increase in his cost would be a 27-28% increase in the retail price he charges.
Steve
That’s the point I’m making, the 25% tariff isn’t on the $1.49/lb price in the grocery store. It’s on the wholesale price at the port of entry.
For example. A box of generic Corn Flakes is currently $2.24 and contains about 10 cents worth of cereal. If corn prices double, does that mean I need to pay $4.48 for a box of Corn Flakes?
Years ago when we were having the national discussion on universal health care in 1993, the Executive Director of the National Restaurant Association lobbying group published a detailed accounting of what it would cost to provide health insurance to employees and the resulting price of a fast food burger.
Inexplicably, providing health insurance to employees was going to somehow require that the restaurant CEO’s compensation rise by $200,000/yr – and the CEO already had a gold-plated health plan.
Just depends on what you get people to believe
intercst