This comment is at the very bottom of the comments right now and I'm glad I looked for it.
I agree by killing the penny we essentially force inflation to happen. Bread priced at $.99 can be sold at $.98 far more easily than bread priced $1 can be sold at $.95. By removing the penny our jumps become more volatile. Something increasing in cost by a penny or two might take a product from 99¢ to $1 or reduce the profit margin a bit now, but when there is no penny the $1 product that needs to cost 2¢ more is going to cost $1.05.
I agree by killing the penny we essentially force inflation to happen. Bread priced at $.99 can be sold at $.98 far more easily than bread priced $1 can be sold at $.95. By removing the penny our jumps become more volatile. Something increasing in cost by a penny or two might take a product from 99¢ to $1 or reduce the profit margin a bit now, but when there is no penny the $1 product that needs to cost 2¢ more is going to cost $1.05.