Here's your competition. Literally $1.97 cereal that is a direct substitute for Cheerios: https://www.walmart.com/ip/Great-Value-Honey-Nut-O-s-Oat-Bre...

The competition is clearly Cheerios which sells for $4.93, which is still not $8 (I did find Cheerios priced above $8 at other stores, but only in family and giant size which are 50-75% larger): https://www.walmart.com/ip/Honey-Nut-Cheerios-Heart-Healthy-...

I'm not making up the numbers. Or the substitutes. Every grocery store I go to has name brand cereals, and then in the exact same aisle, off-brand alternatives that sell for far less.

So yeah it seems like a pretty competitive market to me if I can buy an alternative for 40% of the price of the name brand by reaching for a lower shelf. Is $5 a lot for a box of cereal? Maybe, that's up to you as the consumer. But, name brand cereal is also not a necessity, you can live a very happy life, eating healthy breakfasts without ever having touched a box of cereal.

Again, it seems like a pretty competitive market. Cereal is not a necessity, there are tons of other breakfast foods that substitute just fine, there are a variety of companies selling more or less substitable products through a variety of outlets, and there are no real regulatory barriers to entry. If I don't like one retailer, I can choose from dozens of others owned by different companies. If you think that there is a ton of margin being made, this is your opportunity to get rich selling cereal, or even just investing in General Mills (which has a profit margin of 12% on their goods, and has under-performed the stock market as a whole).

If you don't like the price of an $8 box of cereal, go buy the $5 one, or the $2 one, or don't buy any cereal at all and eat yogurt, or order from Amazon.com where you can get the best of all worlds by having name brand Cheerios brought to your door for $1.99: