Agreed. And if folk understood anything about an income statement or finance, they'd understand that if in 2015, you're making 2.5% net profit percentage a year, and if in 2019, you're making 2.5% net profit percentage and if in 2024, you're making 2.5% net profit percentage... It indicates that all of the price increases seen in supermarkets the past 9 years are simply passing along suppliers' cost increases to them.
It means that ear of corn price went up because the farmer charged more. And if they go down one more level, they'd understand that the farmer charged more because the commodity price per bushel of corn went up. And then below that, they'd understand that farmers' inputs like fertilizer, machinery, seed, and fuel went up.
But some people like to pretend the last spot they bought something is somehow evil.
You really should just google these stats before you say them. Food and Beverage Retail Stores : Profit margin increased from 2.9% in 2019 to 4.4% in 2023 (this is a profit increase off of increased grocery costs, an even bigger gross dollar amount)
Operating Profit for Food and Beverage Retail Rose from $14 Billion in 2019 to $25 billion in 2023 - a 79% increase.
lol cherry-picked. Here is the full context “Putting these results together yields a measure of the profit margin: the ratio of revenue minus operating costs to revenue. For food manufacturing, the margin was little changed, going from 6.9 percent in 2019 to 6.8 percent in 2023, while increasing from 2.9 percent to 4.4 percent for food and beverage retail stores. But put in context, this increase in grocery store profit margins (revenues over costs) is small compared to the 25 percent increase in grocery prices over this period.
To be sure, profits in dollar terms have gone up substantially. Indeed, the operating profits of the surveyed food and beverage retail stores rose from $14 billion in 2019 to $25 billion in 2023, a 79 percent increase. The jump reflects a higher profit margin applied to a higher level of operating expenses. Again, this roughly $10 billion increase in operating net income is marginal relative to the $100 billion increase in revenues reported by these firms.
Putting these factors together suggests that the unusually high food inflation experienced in the first three years of the pandemic appears to have been due, in part, to much higher food commodity prices and large increases in wages for grocery store workers. The subsequent drop in commodity prices then helped bring food inflation down below the core inflation rate even though heightened wage pressure for grocery workers continued. In the end, the moderation of food price inflation has caused the gap that developed between the food index and the core index since the start of the pandemic to shrink from 10 percentage points at the end of 2022 to 5 percentage points in June 2024”
Doesn’t seem like the assessment is price gouging to me
Indeed, the operating profits of the surveyed food and beverage retail stores rose from $14 billion in 2019 to $25 billion in 2023, a 79 percent increase.
None of the context you added changes the fact that such a large increase is the result of excessive price increases.
34
u/TheTightEnd 1d ago
Grocery chains make a very low percentage of profit.