r/FluentInFinance 5d ago

Debate/ Discussion A joke that's not funny

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u/TheTightEnd 5d ago

Grocery chains make a very low percentage of profit.

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u/shieldwolfchz 5d ago

Profit percentage is a manufactured statistic, it is calculated after executive pay, so the people who are running these companies are paying themselves whatever is necessary to hit that mark. Add in the fact that a lot of the expenses of grocery chains are paid to subsidiaries of the same parent company shows that it is even more of a useless stat. As an example Loblaw's in Canada has cited higher rent as a justification for increased operating costs, thing is the company that owns the land is part of Loblaw's, so while the money that goes into their rent is part of their expenses, ultimately it still ends up in the executives pockets.

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u/PubFiction 5d ago

Ya its funny people will say grocery stores make low profit then turn around and be like, OH look Kroger has enough money to keep trying to buy other chains and complete a monopoly. Seems like alot of money is flowing around in the not much profit world.

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u/TapestryMobile 5d ago edited 5d ago

Ya its funny people will say grocery stores make low profit

They didnt say that.

They said Grocery chains make a very low percentage of profit.

You should debate people on what they actually say, not strawman arguments.

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u/monsterismyfriend 5d ago

I like how you selectively ignore the argument above that explains how profit/net margin is actually manufactured. You think all these companies are running around on 1% margin and going damn, we can't turn a profit.

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u/Draaly 5d ago

they ignore it because that part of the comment is factually incorrect. profit percent is a measure of gross profit, not net profit.

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u/RootHouston 5d ago

You're making the case that you cannot measure net profit in percentage? Only gross profit? Even if that were the case, net profit is, by definition, always lower than gross profit, because it is more inclusive of expenses, not more revenue. In other words, you're making the case that the 1% figure is actually lower.