Head in the sand my dude. Canadian groceries were caught red handed colluding on bread price fixing.

Yes, I am aware there are cartels and other anticompetitive practices. I said as much in a comment on Lemmy not long ago - with some detective work you may be able to find it.

Companies charge as much as they can get away with and will always push the numbers higher. They’re not eating costs outbid the goodness of their heart, loss-leaders lead to more spending.

Obviously. And what they can get away with is profit margins up to a certain limit (assuming no monopolies, and at least moderately effective anti-cartel measures), that limit being the point where it becomes easy to enter the market or undercut a competitor, gain massive market share, and still make a lot of money.

They cannot get away with just endlessly taking all profits from productivity gains. These gains have been enormous since the start of the Industrial Revolution, and in most markets profits are on the order of a few percent of turnover, if that.