Yeah, your point about the production costs is correct and seems easily generalizable. I don't think I can generalize the grocers the same way. This is an anecdote from 6 years ago, so take it that way, but in my area the average margin over all the stores and all of their items was just under 2%. Iirc, most grocers were taking losses on certain staples while maintaining a +50% markup on food marketable as healthy. I don't mean organic, just things perceived to be healthy. Some discount grocers and farmers' markets have opened business since then, so it may not be the same anymore.