Part 4 of The $200 Grocery Bill: An Uncomfortable Look at Why American Food Costs So Much

Investigative satire. Skeptical of everyone. Funny, but fact-based. Nobody gets off easy — including you.

Parts 1 through 3 followed your money from the farm to the packing plant. Parts 4 through 10 follow it the rest of the way — into the store, and then somewhere you have never been invited.

Last time I handed you a beef dollar and split it three ways. Fifty-four cents to the rancher. Five cents to the packer. And then I wrote “the retailer takes the rest, roughly 41 percent,” and kept walking, because I had four companies and a cattle chute to get through and I was running out of column.

Two corrections to my own sentence before we go anywhere, because a rancher will write to me otherwise and he’ll be right.

First, those shares move constantly. USDA’s farm share of the retail beef dollar has run anywhere from about 51 to 56 percent across this year alone. Treat 54 and 5 as a snapshot, not a constant.

Second, and more important: that remaining 41 cents is not the grocery store’s profit. It’s everything between the packing plant and your cart — fabrication, cold-chain freight, distribution, labor, shrink, packaging, store overhead, and then whatever margin the retailer keeps. Anybody who tells you the supermarket pockets 41 cents of your beef dollar is misreading a USDA spreadsheet, and I’m not going to be that guy in my own series.

But it’s still the biggest slice on the receipt, and it’s the one nobody has opened. So let’s open it.

I’ve been thinking about that sentence for two weeks, and here’s what finally got me: the grocery store is the only company in this entire chain you have actually met. You have never shaken hands with a feedlot. You have never once, in your life, made eye contact with a Chief Commodity Hedging Officer. But you know your store. You know which door is closer to the milk. You know the self-checkout on the left is the one that doesn’t yell at you. You know, without looking, roughly where they moved the peanut butter, and you resent them for moving it.

You have a relationship with this building.

And that — I want to be very precise here, because this is the whole article — that relationship is the product.

Not the eggs. Not the ribeye. Not the rotisserie chicken revolving under a heat lamp at 8:40 at night like it’s working off a debt. You. Your route through the store, your pause in front of the yogurt, the four times you bought the store brand and the one time you didn’t, the pregnancy you haven’t told your mother about but have absolutely disclosed, in full, to the prenatal vitamin aisle.

That’s the inventory. And in the last five years the industry stopped being coy about it and started saying so out loud, in federal filings, under penalty of perjury, in language that I am going to read to you slowly because I don’t think you’ll believe me otherwise.

From The Kroger Co.’s Form 10-K for fiscal 2025, filed with the Securities and Exchange Commission in March of this year:

“Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams.”

Read it again. Monetizes the traffic. The traffic is you. You are the traffic. You drove there.

And then, four paragraphs later, the sentence that ate my whole week:

“Kroger serves approximately 63 million households annually, and because of our rewards program, over 95% of customer transactions are tethered to a Kroger loyalty card.”

Tethered.

Not “linked.” Not “associated with.” Not “connected to.” Tethered. You tether a goat. You tether a boat so it can’t drift. You tether something that would otherwise get away from you. Somewhere in Cincinnati a lawyer, a communications professional, and an SEC compliance officer all read that sentence, and every one of them thought: yes, that’s the word, that’s exactly right, ship it.

They’re not wrong. That’s the horror of it. It is precisely the correct word. It’s just supposed to be our word, the one we use when we finally figure out what they’re doing. They got there first and put it in the filing.

Gloves on. This is a stack again, and I’m counting.

The Language Autopsy
Before the money, the words. It’s always the words. Carlin’s whole method was that the euphemism confesses before the accountant does, and the grocery industry has produced a vocabulary that belongs in a museum.

“Loyalty.” They call it a loyalty program.

Loyalty is a moral quality. Loyalty is a dog waiting by a door for a man who isn’t coming back. What happens at that register is not loyalty, it’s identification — the transaction cannot be attached to a human being until the human being volunteers to stop being a stranger, and the price of remaining a stranger is thirty cents on a can of beans.

That’s not loyalty. That’s a toll booth.

They named a toll booth after a virtue, and then they put it on a keychain, and you carry it around.

“Rewards.” You are not being rewarded.

You are being paid. Badly. In coupons. For an asset you didn’t know you owned and can’t get back.

That’s not a reward. That’s a settlement offer from a party you didn’t know you were negotiating with.

“Guest.” Part 2 covered this and I’m still not over it. You are not a guest. A guest does not pay. A guest is not scanned.

“Personalized offer.” Personalized to whom, exactly? Not to you — you didn’t write it. It’s personalized to a model of you, built out of your last two hundred visits, and its job is to find the smallest discount that will still move you. That’s what personalization means in retail. Not “shaped like you.” Calibrated to you. It’s not a gift. It’s a key cut to your lock.

“Retail media network.” Four words, three of them lying. It’s an ad business. Say “ad business.”

“Shopper insights.” You.

Wholesale.

“Asset-light.” Kroger’s own phrase, from the filing above. It means we didn’t have to build anything.

Of course they didn’t.

The asset was already there. The asset walked in on its own, twice a week, pushing a cart, and paid for the privilege.

“Alternative profit businesses.” Also Kroger’s. Also from the 10-K. And it’s the worst one on the list.

Alternative to what?

To selling food. To the thing on the sign out front. To the entire stated purpose of the building. Somewhere in an office park, a room full of adults sat down and decided that the money they make from groceries is the regular profit and the money they make from you is the alternative — and then they wrote it down, and had it lawyered, and filed it with the federal government, and not one person in that room laughed or resigned.

Layer one: they named the surveillance after a virtue, named the payment “rewards,” and put the honest word — alternative — on the money that doesn’t come from food.

Why Yours and Not Theirs
Before the deposition, one question worth sitting with, because it’s the reason any of this is happening at all.

Everybody is collecting data on you. Your phone, your car, your television, the app that counts your steps and has opinions about it. So why is the supermarket the one that turned it into a business?

Because a grocery chain owns three things advertisers have wanted since the invention of advertising, and have never once had all three at the same time.

One: who you are. A persistent identity, tethered to a card, unbroken across years. Not a cookie that dies when you clear your browser. A person, with a household, who keeps coming back.

Two: what you actually bought. Not what you clicked. Not what you lingered over. Not what you told a survey you’d probably buy. What you physically picked up, carried to a register, and handed over money for.

Three: a screen and a shelf in the same building. The ability to show you a message and then measure whether you bought the thing — in the same trip, ninety seconds apart.

Facebook has never had number two.

Nielsen has never had number three.

Nobody has ever had all three. Nobody except the place you go for milk.

Your grocery store has had all three the entire time. For forty years it sat in a database nobody was monetizing, because everybody in the building was busy doing the tedious, unglamorous, two-percent-margin work of running a grocery store.

And here’s the scale of it, in the company’s own numbers. Kroger says it serves approximately 63 million households annually. The Census Bureau counts 134.8 million households in the United States.

Do that division.

Now, be fair to them for a second: those two numbers are measured differently. Census counts occupied dwellings. Kroger counts loyalty identities — cards, emails, payment instruments — and it operates in 35 states, not fifty. One physical household can throw off two IDs. Somebody who came in once last March counts the same as somebody who comes in every Sunday.

Fine. Grant all of it. It still lands in the same place.

One chain. Not the industry — one chain — holding a purchase record on a number of American households that has to be measured against the national total to make any sense at all. And a rewards program tying more than ninety-five percent of its transactions to a name.

Now go one step further, because this is the part that surprised me. 84.51°, Kroger’s wholly-owned data science subsidiary, says on its own site that it covers over 62 million households in the U.S., across 35 states and more than two billion transactions a year, and works with “more than 1,500 consumer packaged goods companies, agencies, publishers and business-affiliated partners.” It sells three things: Insights, Media, and Loyalty Marketing. And its media product promises household-level precision across Kroger’s digital properties and the open web.

The open web.

Not the store. Not Kroger.com.

The internet.

What you bought at the grocery store follows you out of the parking lot, onto your phone, and into websites that have never sold a tomato in their lives.

You didn’t leave the store.

The store left with you.

A Brief Deposition Regarding the Card in Your Wallet
Lenny Bruce read his own court transcripts on stage because the transcript was funnier than anything he could write. Today’s witness is a privacy policy. Everything the witness says is a direct quotation from the current published privacy policy of Albertsons Companies — which operates Safeway, Vons, Jewel-Osco, Acme, Randalls, Shaw’s, Star Market, and Pavilions — as last updated December 9, 2025. I have not altered a word. I couldn’t improve it.

Q: State what you collect.

A: Purchase history. Store visited. Payment method.

Q: Go on.

A: “Video and images of you.”

Q: Where.

A: Parking lots. Stores. Checkout areas.

Q: Anything else you’d like to volunteer?

A: “In some states, our cameras may capture biometrics (e.g., facial recognition technology).”

Q: I’m sorry?

A: “In these store locations, you may have noticed the signs in our entrance related to our collection of biometrics.”

Q: Oh, there are signs. Well then.

Q: Let the record reflect that the witness said that without being asked twice. Continue.

A: “Real-time location details.” Wi-Fi. Mobile devices.

Q: And what do you build out of all that?

A: “Inferences derived from personal data/profiling.”

Q: Inferences about what?

A: “Purchase preferences, interests, characteristics —”

Q: Keep going.

A: “— psychological trends, predispositions, behavior, attitudes —”

Q: Keep going.

A: “— intelligence, abilities, and aptitudes.”

Q: You infer the customer’s intelligence.

A: It’s in the policy.

Q: I know it’s in the policy. That’s why I’m reading it out loud. Who else sees this?

A: “Advertisers, marketing partners and platforms, data analytics providers, social media networks.”

Q: And the customer agreed to all of it?

A: They enrolled.

Q: Where does it say all this?

A: In the policy.

Q: How long is the policy?

A: Thousands of words.

Q: And how long is the sign in the window?

A: Two. “Save More.”

No further questions.

The witness saved the customer thirty cents on a can of beans, formed an opinion about the customer’s aptitudes, and is excused with the contempt of this court.

(For the record: I tried to run the same deposition on Kroger’s privacy policy and could not retrieve the text — Kroger’s sites block automated access. So I used the one I could read in full and quote exactly. That’s not me letting Kroger off. That’s me refusing to quote a document I haven’t opened, which is the entire deal I’ve made with you across four of these.)

And what happens to the profile after it’s built? In May 2025, Consumer Reports published an investigation into Kroger’s data practices, built around a single Oregon shopper who filed a formal data-access request under that state’s privacy law. What came back was a profile built around an “income predictor” — Consumer Reports’ words, and Kroger’s tool: an estimate of what that shopper earns, inferred from his groceries. CR also found the predictor “can be inaccurate, and differ markedly from reality,” which is somehow worse. A machine guessing your income from your cart and getting it wrong is still a machine that has an opinion about your income.

And that shopper’s report, per CR, may have been sent to more than 50 different U.S. companies — among them data brokers, tobacco companies, financial institutions, and healthcare technology firms.

Fifty companies. From one person’s groceries.

I’ll be straight about the limits, and about one thing I nearly got wrong myself.

That’s one customer’s records, obtained through one state’s law. It’s a documented case study, not a survey.

And Kroger has a public denial in circulation — the phrase “patently false” — which I was about to hang on this story until I checked what it was actually answering. It isn’t this. Kroger said “the characterization of widespread pricing concerns is patently false,” responding to a different Consumer Reports investigation six days earlier, about expired shelf tags and overcharges. Two separate reports, one week apart.

On the data findings, as far as I can determine, Kroger did not issue a comparable rebuttal. I’d rather tell you that than borrow a denial from the wrong story to look even-handed.

But it’s also the only look inside anybody’s been able to get, and it took a state statute and a formal legal demand to get it. Which is its own answer to the question of how transparent this is.

Layer two: a lifetime of purchase history, your face in some states, your real-time location, and a machine-generated opinion of your intelligence — traded for a rotating handful of coupons, under terms written in a font size chosen specifically so they wouldn’t be read.

Fifty Companies
Everything in that deposition is a disclosure. It’s what the store says it does, in a document written by lawyers to be technically complete and practically unread.

So what actually happens to the file?

There is exactly one place I could find an answer, and it exists because of a quirk of geography.

In May 2025, Consumer Reports published an investigation into Kroger’s data practices built around a single shopper in Oregon — a state whose privacy law lets a resident formally demand to see what a company holds on them. Not a leak. Not a hack. A citizen filling out a form and waiting.

What came back was a profile. It included an “income predictor.” An inferred education level. Brand preferences. Loyalty scoring. A machine’s best guess at a stranger’s financial life, assembled from groceries.

And that shopper’s data, per the investigation, may have been sent to more than fifty different companies — among them data brokers, tobacco companies, financial institutions, and healthcare firms.

Fifty.

From one person’s groceries.

Now the honest limits, because I’m not going to hand you a number without its caveats. That’s one customer’s records, obtained through one state’s law. It’s a documented case study, not a survey. And Kroger disputed the report’s broader characterizations, calling claims of widespread pricing concerns — their word — “patently false.” On the record, as always.

But sit with what it took to get that one look.

A state legislature had to pass a law. A private citizen had to know the law existed. She had to file a formal demand. A national consumer organization had to write it up.

That is the entire apparatus required for one American to find out where her breakfast cereal went.

One.

American.

There is no version of this you can do on your own. No line to call. No statement in the mail. No annual disclosure, no opt-out button that means anything, no clerk who could tell you if you asked.

The store knows your household’s income to a probability.

You know nothing.

And that asymmetry is not a bug, or an oversight, or a thing they’re working on. It’s the product.

The Verdict, Part One
So — is your grocery store the villain?

Not yet.

I’ve shown you what it knows, not what it charges, and those are different indictments. In Part 1 I acquitted the CEO, because his entire compensation package lands on your cart like a snowflake on a battleship. In Part 3 I acquitted the packer’s raw margin, because the receipt genuinely didn’t support the accusation.

I’m not going to break that streak over a privacy policy.

Not today.

But get the shape of what we’ve established, because it does not go away, and everything else in this series is built on top of it.

Your grocery store named the surveillance after a virtue and the payment after a gift. It holds a persistent, unbroken, decade-deep record of what your household eats, drinks, treats, medicates, celebrates, and quietly worries about — tied to your name, on more than nineteen out of every twenty transactions, by its own count. It compiles, in its own published words, filed where anyone could read them and almost nobody does, your face in some states, your real-time location, and a machine-generated opinion of your “intelligence, abilities, and aptitudes.”

Then it sells what all of that says — to advertisers, marketing partners, data analytics providers, and social networks. Not just inside the store. On the open web.

And when one shopper in Oregon used a state law to ask where hers had gone, the answer came back: more than fifty companies.

In Part 2 I told you the club has an org chart, regional chapters, and a newsletter nobody reads that gets filed with the SEC every spring. This is the same club.

It just built a filing cabinet.

And put you in it.

And in that filing cabinet is the truest word anyone has written in this entire series — a word I did not supply, a word their own lawyers chose, a word that got read by a communications professional and an SEC compliance officer and survived all three.

Over ninety-five percent of your transactions are tethered.

Not linked. Not associated. Not connected.

Tethered.

You tether a goat. You tether a boat so it can’t drift. You tether the thing that would otherwise wander off, because you have plans for it, and those plans require it to still be there in the morning.

Case open. Court adjourned, not dismissed.

Friday — Part 5: the number. The one every grocery executive reaches for the instant anybody asks why food costs what it costs. It’s real, it’s audited, it’s four dollars and twenty cents on your $200 cart, and I’m going to defend it — right up until I show you what’s hiding inside it. In Part 2, the overhead machine took $38.40 off that same cart. Friday you find out what the other end of the receipt is doing, and why “we barely make anything” is the most profitable sentence in American retail.

Sources & Receipts
Kroger — the filing and the language

Kroger Co. Form 10-K, fiscal 2025 — “monetizes the traffic,” “asset-light and margin-rich,” “alternative profit businesses,” 63 million households, over 95% of transactions “tethered”
84.51° — “over 62 million households in the U.S.,” 35 states, 2 billion annual transactions, “more than 1,500 consumer packaged goods companies, agencies, publishers and business-affiliated partners,” and media “across Kroger digital properties and the open web”
US Census Bureau — Households by Type: 1940 to Present (Table HH-1): 134,790,000 US households, CPS/ASEC 2025
USDA ERS — Meat Price Spreads (farm share of the retail beef dollar)
What they collect

Albertsons Companies Privacy Policy (updated December 9, 2025) — profiling inferences, facial recognition “in some states,” real-time location, sharing with advertisers and data analytics providers
Consumer Reports investigation of Kroger loyalty data (May 21, 2025) — the income predictor, and a profile shared with more than 50 companies
The Record — coverage of the CR findings, including Kroger’s “patently false” response
Author’s note on method. Across this series, claims that could not be traced to a primary source were cut rather than softened — including several I wanted badly. Where the evidence cuts against my own argument, I’ve put it in the text rather than the footnotes. If research can’t verify it, it doesn’t ship.