I think it is more greed than actual cost.  I remember back to the 1970s when grain prices went up.  Local auto stores had been selling 8 spark plugs for less than $5.  Next time we came in for a set they were over $8.  Hmmmm.  Did not buy them.  Next time they had them for sale for slightly over $5.

They are packinging products in small quanities and jacking up the price.  Greed.   

What if the grocery store sold individual wrapped cheeze 2 to a package instead of 12 slices per package for $5.00 or .42/slice.  Would you be upset if they now only stock cheeze in 2 package packs for $1.50 ?  Same principle that the hardward store is using.  Greed. 

I was looking for emery cloth in the same hardward store that sold the washers for .35.   They had 2 ft of emery cloth for $4.56.  Now how many of you think it is necessary to price emery cloth for $2.28/ ft to be profitable.   ( they also had 4 ft for sale at about $1.50/ft)  I looked on the internet and bought about 25 ft shipped to my door for about .60/ ft.  With more effert I prob. could of even got it cheaper, but at the age of 72 and what little shop work I do any more I think 25 ft will last me a life time.  

Just plain greed.  

All the hardward store I go to here in Nebr. have the same pricing system, so it is not a small town thing. 

I don't even think of buying nuts and bolts at the hardward store.  Implement dealer has them for at least 30% less.  Hardware store doesn't even stock 7/16 inch bolts.  Now they have 150 -200 cans of spray paint.  Every shade under the sun, but no 7/16 inch bolts.  Crazy world.  

I can buy big name brand spring lawn ferilizer at Bomgaars for 50% less than my local hardward store.  Exact same stuff.