New Jersey Lawmaker Has Plan To Lower Supermarket Prices

NEW JERSEY — A congresswoman from New Jersey has a plan to lower prices at supermarkets by making it easier for small businesses to compete with mega-chains.

On Wednesday, U.S. Rep. Mikie Sherrill (NJ-11) released details about a proposed federal law that she has dubbed the “Reduce Food Prices Act.”

According to Sherrill, her bill – introduced concurrently with U.S. Rep. Jahana Hayes of Connecticut – would work by giving tax breaks for small grocers to start businesses, hire workers and increase competition in areas with “high corporate consolidation.”

The end result? Lower prices for families when they hit the supermarket checkout line, she says.

“All across the Garden State, I’ve heard from families who have struggled to keep up with rising prices at the grocery store, making it harder to put food on the table and make ends meet,” Sherrill said.

According to Sherrill, food prices have increased significantly for families since the COVID-19 pandemic, with grocery prices rising by over 25 percent from January 2020 to July 2024. Additionally, in 2024, the four largest food retailers account for more than 50 percent of national grocery store sales – a big increase over the past two decades.

One study found that increased food retail concentration at the local level is associated with large increases in food prices, while another found both that market concentration among food retailers is strongly linked to higher prices and that food price inflation declines when new businesses enter a concentrated market dominated by traditional supermarkets.

Sherrill’s office provided the following breakdown of her proposed legislation:

“The Reduce Food Prices Act would provide tax incentives for the establishment and operation of small food retail businesses in areas with high food retail concentration and low levels of competition. Specifically, it would create and expand tax incentives for small businesses in the food retail industry that operate in counties where the Herfindahl-Hirschman Index – a measure of industry consolidation by the Economic Research Service of the U.S. Department of Agriculture – is at or above 1,400, indicating that there is moderate to high market concentration in that county’s retail food sector. For these businesses, the legislation increases the Rehabilitation Tax Credit for investments in the restoration and re-use of historic buildings, the Work Opportunity Tax Credit for the hiring and employment of certain workers, Bonus Depreciation for the purchase of certain investments in new or upgraded equipment or property, and the Qualified Business Income Deduction for certain businesses’ pass-through income. Also, for these businesses, the bill creates a New Food Retail Business Tax Credit equal to 15 percent of a small food retailer’s capital investment in its first three years of operation.”

The Reduce Food Prices Act has been endorsed by consumer advocacy organizations that include the Consumer Federation of America, Consumer Action, and Public Citizen, the congresswoman noted.

“Monopoly power in the food retail sector has raised prices and reduced choices for consumers,” said Thomas Gremillion, director of food policy at the Consumer Federation of America.

“By creating incentives for small businesses to compete in areas where the big retailers have cornered the market, the Reduce Food Prices Act will help to level the playing field and build a more resilient, healthier food system that benefits not just consumers – but also workers, farmers and ranchers, rural communities and the environment,” Gremillion said.

Grocery chains are getting bigger and bigger in a tectonic shift in the supermarket industry over the past several decades, according to an analysis by The Washington Post that looks at consolidation in the supermarket industry.

The traditional grocery store industry has shrunk to the point that, according to The Post’s analysis, a third of U.S. grocery stores are now owned by just four companies — Walmart, Kroger, Albertson’s and Aldi’s (Süd), the fastest-growing supermarket chain in the country. See Related: These Grocery Chains Dominate As Industry Shrinks, New Data Shows

SHRINKFLATION

Sherrill said that rising bills aren’t the only way that shoppers are being unfairly squeezed. The practice of “shrinkflation” – when a corporation reduces the size of a product without lowering their prices – also needs to be stopped, she urged.

Earlier this year, Sherrill signed on to the Shrinkflation Prevention Act, legislation that would prevent corporations from “deceptively” selling less of a product without lowering the price accordingly.

New Jersey’s 11th District includes the following municipalities:

• Essex County – Belleville, Bloomfield, Cedar Grove, Fairfield, Glen Ridge, Livingston, Maplewood, Millburn, Montclair (part), North Caldwell, Nutley, Roseland, South Orange, West Caldwell
• Morris County – Boonton, Boonton Township, Butler, Chatham, Chatham Township, Denville, Dover, East Hanover, Florham Park, Hanover, Harding, Jefferson, Kinnelon, Lincoln Park, Madison, Mendham Twp (part), Montville, Morris Plains, Morris Township, Morristown Town, Mountain Lakes, Parsippany-Troy Hills, Pequannock, Randolph, Riverdale, Rockaway, Rockaway Township, Victory Gardens
• Passaic County – Little Falls, Totowa, Wayne (part), Woodland Park

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.