Families across New Jersey and the nation are feeling the pinch of rising grocery costs, making it increasingly difficult to afford essential food items. Standing at Compare Fresh in Trenton, Congresswoman Mikie Sherrill (NJ-11) introduced the REDUCE Food Prices Act, a crucial piece of legislation aimed at tackling this very issue. This act seeks to inject greater competition into the supermarket and grocery industry, directly addressing the escalating food prices that are burdening households.
Joined by Mercer County figures including County Executive Dan Benson, Deputy County Administrator Taraun Tice McKnight, and Hamilton Mayor Jeff Martin at the Compare Fresh location, Rep. Sherrill detailed how the REDUCE Food Prices Act, co-introduced with Rep. Jahana Hayes (CT-05), proposes tax incentives for small, independent grocers. These incentives are designed to encourage the establishment of new businesses, stimulate job creation, and foster a more competitive marketplace, particularly in areas dominated by large corporate chains.
“Throughout the Garden State, families have voiced their growing concerns about the relentless rise in grocery prices. It’s becoming a real struggle to keep food on the table and manage household budgets. That’s the driving force behind the REDUCE Food Prices Act. By boosting competition through tax credits for smaller grocery stores, we aim to bring down those prices for families,” stated Rep. Sherrill. She further emphasized, “Our efforts don’t stop here. We are also actively working to combat price gouging and the deceptive practice of ‘shrinkflation’, where companies reduce product sizes without a corresponding price decrease.”
Mercer County Executive Dan Benson strongly endorsed the legislation, stating, “Congresswoman Sherrill’s initiative to support independent grocery stores through tax credit incentives is exactly what’s needed. Independent grocers are deeply rooted in our communities. By providing these tax credits, as proposed in her legislation, we can effectively lower food costs for families right here in Mercer County.”
Taraun Tice McKnight, Deputy County Administrator & Director, Department of Human Services, Mercer County, highlighted the broader community impact: “Increased food costs directly correlate with rising food insecurity rates in Mercer County. Families are forced to make impossible choices – food versus rent, food versus childcare. This creates significant disruption in people’s lives. The REDUCE Food Prices Act is a vital step towards alleviating these pressures on families.”
The REDUCE Food Prices Act has garnered significant support from consumer advocacy organizations. The Consumer Federation of America, Consumer Action, and Public Citizen have all voiced their endorsement.
Thomas Gremillion, Director of Food Policy at Consumer Federation of America, explained, “Monopolistic practices in the food retail sector have undeniably led to higher prices and fewer choices for consumers. By incentivizing small businesses to compete in markets currently dominated by large retailers, the REDUCE Food Prices Act promises to level the playing field. This will foster a more resilient and healthier food system, benefiting not only consumers but also workers, farmers, ranchers, rural communities, and the environment as a whole.”
Data indicates a concerning trend of escalating food prices. Since the onset of the COVID-19 pandemic, families have experienced significant increases, with grocery prices surging by over 25 percent between January 2020 and July 2024. Furthermore, market concentration within the food retail industry is on the rise. In 2024, the four largest food retailers control over 50 percent of national grocery sales, a substantial increase over the past two decades, contributing to inflated prices for consumers.
Research supports the link between market concentration and higher food prices. One study highlighted that increased food retail concentration at the local level is directly associated with significant increases in food prices. Another study further corroborated this, finding a strong connection between market concentration among food retailers and elevated prices. Importantly, this research also indicated that the entry of new businesses into concentrated markets, traditionally dominated by large supermarkets, leads to a decline in food price inflation.
The REDUCE Food Prices Act directly addresses this issue by offering targeted tax incentives to encourage the establishment and operation of small food retail businesses in areas characterized by high food retail concentration and limited competition. Specifically, the legislation proposes to create and expand tax incentives for small businesses within the food retail sector operating in counties where the Herfindahl-Hirschman Index (HHI) – a measure of industry consolidation – is at or above 1,400. This threshold, defined by the Economic Research Service of the U.S. Department of Agriculture, signifies moderate to high market concentration within a county’s retail food sector.
The tax incentives outlined in the bill include enhancements to the Rehabilitation Tax Credit for investments in historic building restoration, the Work Opportunity Tax Credit for hiring specific worker categories, Bonus Depreciation for investments in new or upgraded equipment, and the Qualified Business Income Deduction for pass-through income.
Crucially, the bill also introduces a New Food Retail Business Tax Credit, providing a credit equal to 15 percent of a small food retailer’s capital investment during their first three years of operation.
Expanding on her commitment to fair pricing, Rep. Sherrill previously endorsed the Shrinkflation Prevention Act. This legislation directly tackles the deceptive practice of shrinkflation, preventing corporations from reducing product sizes without proportionally lowering prices.
By introducing the REDUCE Food Prices Act at Compare Fresh Of Trenton, Rep. Sherrill underscores the importance of local businesses and community-focused solutions in addressing broader economic challenges like rising food costs. This legislation represents a significant step towards creating a more competitive and equitable food retail landscape, ultimately benefiting families and communities throughout New Jersey.
