Grocers do not have easy jobs.
Keeping fresh food stocked in well-lit, clean, giant stores so that Americans can shop on a whim for everything from cumquats to canola oil on a 24-7 basis is daunting to say the least.
But it also has some perks for grocers, profits from sales of sugar being one of them.
Retail sugar prices reflect what a grocery shopper pays for a pound of sugar at their local grocer. And because sugar producers package, store, and ship the sugar on a grocer’s behalf, nearly every penny of difference between the retail price and the wholesale price grocers pay producers is pure profit.
Unlike wholesale refined sugar prices, retail prices and grocer profit on sugar have steadily climbed through the years. In 2013, for example, grocery chains charged consumers more than double what they paid sugar producers for the product.
To grocers’ credit, they do sometimes pass along a portion of savings to consumers when sugar prices fall. Retail prices fell from 64.32 cents per pound to an average of 61 cents over the first two quarters of 2014, for example.
The same can’t be said for food manufacturers and large candy companies. Prices of sweetened products don’t come down and have historically risen regardless of sugar price. Sugar price, it seems, has nothing to do with a food product’s cost.