relevant Gemoras
Bava Metzia 40b – Rav Yehuda was selling oil and sediment, not wine.
Bava Basra 90-91 Shmuel (R Yehuda’s teacher) one can not profit more than 1/6th
plus payment for labor and selling expenses
Rambam: this limit is set by Beis Din and is for essentials only (oil, wine, flour).
Shulchan Aruch (CM 231:20)
overall discussion is that 1/6th is enforced only under some circumstances – having a beis din regulating prices and essentials
and when all grocers do not keep to the limit, one does not have to.:
SMA (38 and Prishah 26 DH d’Chi): When there is no Beis Din and everyone else transgresses Chachamim’s words not to profit more than a sixth, one who fears Hash-m need not be careful about this. If not, when he finished selling cheaply, all others will sell for a high price!
AAQ – I am not sure SMA works in current markets: Walmart shows you the power of low profits: one who sells cheaper can order more merchandize and become as rich as Waltons.