In our last five posts of The Food Monopoly Files, we exposed how monopoly power has taken hold across almost every part of our food system—from meatpacking, to seeds, pesticides, fertilizer, and farm machinery.
Now we turn to the grocery checkout line, where corporate consolidation determines what farmers are paid, what consumers pay, and even what products end up on store shelves.
It’s yet another way a handful of corporations drain wealth out of rural America and push farmers out of business.
Few Buyers, Total Leverage
Grocery retail is one of the most concentrated links in the food chain. Today, the U.S. has one-third fewer grocery stores than it did 25 years ago. The result is that just four corporations—Walmart, Kroger, Costco, and Albertsons—control more than two-thirds of the U.S. grocery market. In many communities, Walmart alone holds more than half of the market share.
When one of these mega-retailers holds most of the purchasing power, it can demand the lowest possible prices from suppliers—knowing they can’t afford to lose access to its shelves. To keep those contracts, suppliers slash prices for the biggest buyers like Walmart, then turn around and recoup their losses by charging smaller or independent retailers more.
The result is a two-tiered system: Large chains get special discounts while independent grocers and regional stores pay inflated wholesale prices. This kind of favoritism between big and small buyers goes against the purpose of the Robinson-Patman Act—a law meant to stop large corporations from using their size to bully suppliers. But decades of lax antitrust enforcement have allowed the practice to flourish unchecked.
Since suppliers can’t afford to lose major purchasers like Walmart, they give in to the giant grocers’ pricing demands. To balance their books, those suppliers turn around and squeeze the farmer or hike the prices to the smaller grocer.
This isn’t a free market. It’s a system designed to move wealth upward.
What Farmers Are Facing
Behind every grocery merger and mega-retailer lies a growing crisis for the people who grow and raise our food.
As big-box chains like Walmart expand and local grocers disappear, farmers lose essential markets for their goods. With so little competition, powerful retailers dictate prices to suppliers, pushing the squeeze down the supply chain until it lands on the farmer. For some foods, farmers now get only 15 cents out of every dollar consumers spend at the grocery store.
As retailers consolidate, they also drive consolidation among their suppliers—favoring those large enough to meet massive, uniform supply contracts. Smaller and mid-sized farms are often shut out entirely, unable to produce at the volume or cost required by corporate buyers. Over time, that pressure forces farms to scale up, merge, or close—hollowing out the diversity and resilience of American agriculture.
We’ve seen this play out before. When Albertsons acquired Safeway in 2015, it kept contracts only with its largest produce suppliers and dropped most smaller ones. And when Walmart decided to control its own dairy supply rather than buy through Dean Foods, Dean Foods responded by canceling more than 100 contracts with dairy farmers across eight states. Within two years, the company was bankrupt, and hundreds of family farms were left behind.
The Hidden Tax on Every Family
Just as farmers are squeezed on one end, consumers are squeezed on the other.
Mega-retailers use their market dominance to raise prices and drive record margins—a quiet transfer of billions from American households to corporate shareholders.
They can get away with it because in the absence of other grocers, consumers must submit to mega-retailers’ price hikes. In November 2021, Kroger’s chief financial officer said that they were “very comfortable with our ability to pass on the increases that we’ve seen at this point. And we would expect that to continue to be the case.”
A consumer’s weekly grocery run is actually the final extraction point of monopoly power.
When a handful of companies dominate across inputs, processing, distribution, and retail, they can raise prices at will because consumers have nowhere else to go.
When Power Dictates What Ends Up on Shelves
The control retailers wield extends far beyond the price that appears on the sticker. What looks like a supermarket filled with choices is, in reality, an illusion. Most of the brands lining store shelves—whether meats, cereal, or snacks—are owned by just a handful of massive corporations.
Dominant retailers decide which of these brands get prime placement, which are buried, and which disappear entirely. Their own store-brand private labels—managed by the same corporations setting the rules—crowd out competitors and make it nearly impossible for independent food businesses and local producers to compete.
The marketplace looks abundant, but behind the shelves, it’s controlled by a few powerful corporations. Behind the bright packaging and endless options lies a system that limits true competition, squeezes farmers and small businesses, and leaves consumers with fewer choices than ever before.
Rural America Left Behind
Retail consolidation has hit rural America especially hard. As giants like Walmart drive independent grocers out of business, they extract wealth from small towns and leave behind economic and nutritional deserts.
With fewer grocery options, families lose access to fresh, healthy food. Many communities are left with only dollar stores, which mostly sell packaged and processed products. As competitors shrink or disappear, grocery workers also lose leverage to negotiate better pay or working conditions. The same consolidation that squeezes farmers and consumers now hollows out the rural towns that once sustained them.
Restoring Fairness in the Retail Market
We don’t have to tolerate a system where four corporations dictate the price of food, the fate of family farms, and the choices available to every American household.
Rebalancing power in the grocery sector will require strong antitrust enforcement—including renewed use of the Robinson-Patman Act to curb price discrimination—blocking harmful mergers, and building support for independent regional food systems.
Farm Action will continue to expose how grocery retail monopolies drive up prices, constrict choices, and extract wealth from farmers and communities, and to push for policy that restores fair markets across the food system.
This post, like the rest of our Food Monopoly Files series, draws from Kings Over the Necessaries of Life, our landmark investigation into how monopoly power reshaped U.S. agriculture. Next up, we’ll examine how government-mandated commodity checkoff programs—funded by farmers themselves—have been weaponized to lobby against their own interests.
