Those are not good examples. One is sugar water with extremely high profit margins, and the other is likely sold as a loss leader or at most, at cost.

Food prices have been changing for a long time, but only if you pay attention to quantity and ingredients. With gas prices, the unit quantity or ingredient cannot change, so the change is obvious. Same with things like milk and eggs and vegetables though, which do change often.

With processed food, the seller has much more ability to maneuver around having to increase price.

Yeah - my point was that once prices start going up noticeably, all the other processed food manufacturers will increase their prices, also (often with a "return to what the original size was" along with it).

> One is sugar water with extremely high profit margins

I assure you, as someone in a position to know the numbers, that sugary beverages have low margins. It is very expensive to move them around, marketing is expensive, and customers are very price sensitive.

Is this at the retail level? At the producer level, profit margins seem quite decent:

https://www.investopedia.com/ask/answers/071015/what-profit-...

Logically, if the same quantity of Arizona Ice Tea retails for the same price as it did 25 years ago, then someone in the supply chain is or was making huge profit margins, considering the increase in materials and transport costs.

I don’t have any special insight into Arizona.

Adding onto this a little: I was shocked at how volatile some food prices are, and how much some have gone up recently

https://www.fao.org/worldfoodsituation/foodpricesindex/en/

Depending on how you set your endpoints, you can basically come up with any number for inflation you want, from 1.7% to 20+%

I guess this is all well-understood and taken care of under the hood by processed food companies, though, since the Big Mac Index has pretty steadily held to an inflation level near the CPI

The big mac index tracks labor costs as much if not more-so than wholesale food prices.

Price of anything can be reduced to labor, energy, and scarcity as, you move up the supply chain.

It's because the consumer literally has to buy hundreds of things. Tinkering with a penny turns into a dollar real quick.

That's not how it works. It's percentage changes that are significant.

Every thing in my cart increases by a penny. It (the cart, my food) now costs $2 more. Easy math. Change that to percentages and amount increases, of course.

They do play with pennies. I worked in a huge national restaurant chain as a teenager and went through numerous menu updates. They were always flipping nickels and pennies all over the place on the menu. As a kid I thought changing the menu prices by five cents was ridiculous. Apparently, that's how it works in this business with razor thin margins.