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2) Groceries have a fairly inelastic demand curve. i.e., people are likely to continue buying groceries even at higher prices, for the most part. Therefore, there is very little price sensetivity. Lowering prices won't significantly increase the number of people buying the product, so their profit would likely drop. The only reason for a company to lower the price of something is if they think it will increase sales by a percentage greater than the precentage of the price drop.
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'He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.'
-TJ
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