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In theory, competitive markets should push profit margins near zero, as long as consumers have ample choices in any given category, among other hypothetical factors.

Dollar Tree DLTR -2.6%, who recently raised prices to $1.25, increased net income 62% over 2020, on top of a 10% increase in gross profits. These all come less than a year after an initial round of windfall pandemic profits for major food retailers, which saw 2 billion dollar rounds of Kroger stock buybacks and the Walton family adding $45 billion to their wealth.

And large-scale retailers have reflected these trends. When supplier costs rise en masse, grocery stores tend to pass through the increases and then some, so that their gross margins also increase.

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