By Rogé Karma Voters have consistently cited the cost of groceries as their top economic concern—and it isn’t hard to understand why. From 2015 to 2019, the average worker’s wages grew about 30 times faster than the price of groceries. Then came the pandemic. From 2021 through the end of last year, grocery prices increased faster than both overall inflation and wages. Today, the cost of food is about 30 percent higher than it was in January 2020.

Unfortunately, most ideas in circulation for how to bring down grocery costs, such as city-run grocery stores and price controls, would hardly make a dent in the issue. But a new think tank called the Kitchen Table Project, run by a group of left-leaning economists and policy wonks, is floating a more direct intervention: a public option for food purchasing.

The U.S. government already uses its buying power to purchase food directly from suppliers at low prices on behalf of military families and public schools. If the government decided to do the same on behalf of American consumers more broadly, the proposal’s authors argue, it could save the average family hundreds of dollars or more at the grocery store every year while costing taxpayers almost nothing. Despite sounding eerily like Soviet-style central planning, the proposal’s economic merits are strong. Whether it goes anywhere or ends up in the same place as a public option for health care (rather far from reality) is another matter.

Every effort to lower food prices inevitably runs headfirst into an inescapable fact: Grocery stores don’t make a whole lot of money. The average business in the United States makes an 8 to 10 percent profit every year; grocery stores typically make just 1 to 3 percent. These margins rose slightly during the pandemic, because many large retailers used inflation as an excuse to jack up prices, but they have since returned to pre-pandemic levels. The main reason grocery prices have risen so much is that, thanks mostly to pandemic-era supply shocks, retailers themselves are paying far higher food and labor costs, which are then passed on to consumers.

This creates an impediment for many progressive proposals. New York City Mayor Zohran Mamdani has promised to establish city-run grocery stores that would charge 30 percent below market prices. But public grocers can’t sell food for much cheaper than private ones without large public subsidies, which effectively just shift the costs away from shoppers to taxpayers. Proposals to institute a version of price controls on grocery stores run into a similar issue: There just isn’t much room to lower prices without putting stores out of business.

Earlier this year, the Center for American Progress, a progressive think tank, proposed a national price cap on a basket of grocery-store staples that it estimates would save the average family of four just $88 in the first year it could be implemented. “It’s harder for the government to intervene to lower grocery prices than in basically any other sector,” Jared Bernstein, the former chair of Joe Biden’s Council of Economic Advisers and a co-author of that proposal, told me. “For housing or health care or child care, there are all sorts of market inefficiencies you can fix to bring down costs. But when it comes to grocery stores, there’s just not a lot of extra money lying on the table.”

Grocery stores are just one node in a much larger food-supply chain. It includes farmers (who grow crops and raise livestock), food processors and meatpackers (who turn those raw inputs into ingredients such as flours, oils, and ground beef), food manufacturers (who take those ingredients and turn them into finished products such as cereals, frozen meals, and snack foods), and distributors (who deliver that food to grocery stores and restaurants). These other parts of the supply chain are collectively responsible for about three-quarters of the total cost that Americans pay for food.

Although neither farmers nor grocers make very much money, many of the middlemen who operate between them make plenty of it. Egg producers such as Cal-Maine and meatpackers such as Tyson’s generally make 4 to 12 percent profits. Food processors such as Ingredion make 10 to 15 percent. Leading food manufacturers such as General Mills and Kraft Heinz make 15 to 19 percent.

“If you’re trying to figure out how to reduce prices, you have to ask: Where is the actual money being made?”Skanda Amarnath, the executive director of Employ America, an economics-focused think tank, told me. “And the answer is: It’s all in the middle.”

One reason food prices rose so much during the pandemic is that many of these middlemen took advantage of supply shocks and consumer confusion to boost prices. Tyson’s beef-packing profits more than tripled from 2019 to 2021 as slaughterhouse shutdowns generated a national beef shortage. Bunge, a commodities trader, saw profits nearly quadruple from 2019 to 2023 thanks to global crop-market disruptions, such as the Russia-Ukraine war.

In 2022 and 2023, food manufacturers such as Pepsi, Kraft Heinz, and General Mills embraced a strategy, known as “price over volume,” in which they actively raised their prices, leading to higher profits even as they sold less overall. From 2024 to 2025, Cal-Maine saw its profits triple as avian flu wiped out a large portion of the country’s chicken population.

When the Kitchen Table Project conducted an analysis of where food-industry profit margins have increased the most since 2019, they found those increases overwhelmingly concentrated among companies that operated in the middle of the supply chain.

Many grocery stores have little choice but to accept the high prices that these middlemen charge. That is because a large portion of America’s grocers are either independent local stores or midsize regional chains that own a tiny slice of the overall market, whereas many of their suppliers are megacorporations that operate in highly concentrated markets (Tyson’s, Cal-Maine) or have strong brand loyalty (Pepsi, Kraft Heinz). A local grocer can’t afford to lose, say, Pepsi as a supplier, but Pepsi doesn’t need every single local grocer.

This power imbalance gives food suppliers the ability to set prices at relatively high levels, knowing that grocery stores need their business to compete for customers.

Although some small and independent grocers have formed buying clubs to correct this imbalance, they generally continue to face much higher prices than their larger competitors. In one study, a team of food economists compared the prices of “staple foods” such as eggs, milk, and rice among 140 small grocery stores and nearby supermarkets; they found that almost every single item was anywhere from 10 to 54 percent more expensive at the smaller store. When the National Grocers Association, an advocacy organization representing 21,000 independent grocers, recently conducted a survey of its members, many of whom were part of wholesale buying associations, it found that “in many cases, the wholesale price offered to independent grocers is higher than the retail price at wholesale clubs like Costco.”

This problem extends beyond just your local mom-and-pop grocer. Only four chains own more than 5 percent of the national market: Walmart (20 percent), Costco (8 percent), Amazon (8 percent), and Kroger (8 percent). As a result, even most national supermarket chains can’t secure the same low prices as Walmart. A February analysis from Consumer Reports compared identical grocery baskets across 35 major chains and found that relative to Walmart, Meijer’s prices were 10 percent higher; Kroger’s, 15 percent; Publix’s, 20 percent; and Albertsons’, 25 percent.

One way to lower food prices, then, would be for the government to provide a public option for food purchasing. The Kitchen Table Project argues that the federal government should launch an “affordable groceries partnership” in which it would agree to purchase a basket of food staples, including eggs, ground beef, milk, produce, rice, and peanut butter. Because the government would be buying in large quantities, it would have leverage to negotiate down the prices for these food items. Then it would sell to participating grocery stores at that lower price point.

If the program were successful, then independent local shops and midsize national chains would enjoy access to the same cost savings that only the largest supermarkets currently enjoy. In exchange, the stores would have to agree to pass the great majority of the savings on to consumers. People who now shop exclusively at Walmart probably wouldn’t see lower prices; Costco and Kroger shoppers might not either; but everyone else likely would, assuming that their store of choice decided to participate in the program.

And “everyone else” includes millions of Americans. (More than half of the total grocery-store market consists of businesses with less than 5 percent market share.) “You can think of it almost like a Costco card for grocery stores,” David Ortega, a Michigan State University food economist, told me. “It’s one of the more promising potential solutions to lower food costs that I’ve seen.”

The federal government already does a version of this. The Defense Commissary Agency, part of the Department of Defense, engages in direct price negotiations with food suppliers to secure grocery items for the country’s active-duty service members and their families, roughly 3 million people in total. The Department of Agriculture has a similar program for securing low-cost food items for public schools and food banks across the country. The size of these purchases gives the federal government the leverage to demand low prices, and it then passes the savings directly on to its members (along with generous subsidies that lower prices even further).

Analysts at the Kitchen Table Project estimate that if the typical American family were to gain access to the same food prices that schools and military families pay now (minus the subsidies), they would save roughly $315 a year on groceries. The initiative would cost taxpayers nothing aside from the relatively small expense of administering the program.

If anything, these savings estimates are conservative. They are based on the prices the government program is able to achieve at its current size. But expanding this program to any willing private grocery store across the country would create a large national network that could rival or surpass the size of even the largest supermarket chains in the U.S. today, giving the government more leverage to demand even lower prices. “There are lots of places in the food-supply chain where margins are relatively fat because of a power asymmetry between grocers and their suppliers,” Amarnath, who helped develop the Kitchen Table Project proposal, said.

“If the government can fix some of that asymmetry, then it can produce some really meaningful savings.”The proposal could also lower prices in less direct ways. Currently, giant chains are able to secure far lower prices from suppliers than smaller retailers are, which can allow them to drive their competition out of business and dominate local markets. (A 2019 analysis found that in 43 metropolitan areas and 160 smaller markets across the country, at least half of grocery sales went to just a single retailer: Walmart).

This dominance, in turn, allows those larger supermarkets to raise prices in specific markets. A study this year from the Federal Reserve Bank of Atlanta found that from 2006 to 2020, food inflation was considerably higher in areas with more market concentration, because lack of competition allowed retailers to charge higher prices without worrying about losing customers.

But if small and medium-size stores could suddenly also secure lower prices from suppliers, that dynamic might change. Smaller retailers would be able to stay in business, areas dominated by a single chain would become competitive, and larger retailers would have to compete much harder in those markets if they wanted to retain their advantage. “I think we’d finally see some meaningful competition in many regional markets that currently lack it,” Claire Kelloway, a program manager for fair food and farming systems at the Open Markets Institute, told me. “And that would have knock-on benefits to the whole system that go well beyond just the initial savings.”

Although a public option for grocery buying might sound good on paper, implementing such a program would come with many challenges. It would involve scaling up a series of relatively small programs into one of the largest food-procurement systems in the world, responsible for securing food for tens of millions—perhaps hundreds of millions—of people. That would be a herculean undertaking for any government, let alone one that has had its workforce gutted over the past two years. (Between the end of 2024 and the end of 2025, USDA, the department most likely to be tasked with administering the public option, lost about 20 percent of its workforce.)

Even if the program could be successfully stood up, the list of open questions is long. Will a grocery store in a small town in Iowa or eastern Washington State get the same deal as a store in New York City or Los Angeles? Who would determine which products get priority shelf space in the grocery stores? (Right now, brands outbid one another for such space.)

What happens if grocery stores try to game the system—for instance, by raising prices on nongovernmental items to boost their profits? Could the program ever hope to secure prices lower than what big chains already pay? “It’s a really interesting idea on paper,” Ortega, the food economist, said.

“But there are a lot of questions you’d need to answer and details you’d need to figure out to actually make it work.”Add to that list the politics of getting such a program passed in the first place. Sure, voters are concerned about the high cost of groceries, but that might not necessarily translate neatly to widespread support for new legislation. Here, the politics of health care provide a helpful analogy. For years, voters have relentlessly told pollsters they are upset about health-insurance costs and would theoretically support a public option to bring them down.

But every effort to actually enact such a policy—most recently during the passage of the Affordable Care Act, which originally included a public option—has failed spectacularly in the face of overwhelming industry opposition. It isn’t difficult to imagine the same happening to a public option for groceries, given that several well-funded interest groups—including giant retailers, major food brands, and dominant suppliers—would inevitably team up to wage a public pressure campaign against it.

One key difference between the politics of health care and that of groceries, though, is that when it comes to health care, politicians have a range of backup options to lower costs for consumers, many of which eventually made it into the Affordable Care Act. When it comes to groceries, backups simply don’t exist; the public option is one of the only ideas that could meaningfully lower prices; even lifting President Trump’s tariffs would provide only a onetime windfall.

The sheer difficulty of delivering on food affordability, in other words, may somewhat counterintuitively become the public option’s greatest asset. If there’s one thing that politicians fear more than angering Big Food, it may be failing to deliver oft-promised cost relief to seething voters.