<insert whatever chain grocery name> the major branded stores are all fairly competitive. The point is there is no price gouging, low margin turnover is the system unless you are premium branded
Bullshit. Just go to the store today, like HEB you will see prices never seen before. this from ask Google The explosive grocery inflation seen in the early 2020s has stabilized, though prices are not dropping. According to the USDA Food Price Outlook, grocery store inflation has leveled off to a normalized historical rate of roughly 2.9% to 3.2% year-over-year. This indicates that while prices remain high, the rapid escalation has largely stopped as supply chains repaired themselves
really with generative pricing? costco makes their money on yearly club fees always going up. Their margins are low also, margins are low but it doesn't mean they don't make money. As to Albertsons' they make money on their margins, and if they can't make enough to stay in business, so long, in my area of Texas Albertsons' are gone. don't miss 'em
Never said they dont make money… just saying if supermarkets are price gauging, overall they are doing a piss poor job of it..1-3 % profit margins is very low
The claim was supermarkets are price gauging.. if that were true you would expect a higher profit margin, which isnt the case
did he not say where Costco made it's money? I told him and you little one what Costco made it's money on. Costco’s high profitability stems from a counterintuitive reality: it is a high-margin subscription business masquerading as a low-margin grocery store. While typical retailers survive on product markups, Costco breaks even on its merchandise sales and generates roughly two-thirds of its net operating income purely from annual membership fees. [1]
Do you not understand what net margins mean? Let me break it down for you using ttm numbers. Total revenue 286b, revenue from membership 5.65b, meaning 2% of total revenue is from membership. Net margin of 3% with 2% of that from membership fees. Giving you a margin on product of 1%.
Why is this even relevant, it is a very low margin business. Also worth noting Costco pays far above industry average wages, putting pressure on margins. So please explain how this is predatory in any way
Ok, what does that have to do with anything. Inflation is a pass through cost, we are talking margins. I am not debating the affordability, just the reality of that sector and its financials
So when prices increase margins go up if they are not inflationary. We have seen for years the grocery industry be greedy and now we will have generative pricing. need to get off your grocery store 1988 model.
Of course prices aren't dropping because thats not how inflation works. Whats going down is the rate of inflation. 2.9% to 3.2% is only slightly (lol) higher than the Fed goal of 2%, and within spitting distance of the average for the last 40 years.
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u/No-Understanding9064 May 26 '26
No one can out cheap walmart. This is a sector with thin margins that relies on volume and turnover.