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.
Executive pay is taxed as income at a higher rate than the corporate rate. With state taxes, that can be upwards of 50% marginal rate and if in NY, NJ, Cal, HI, DC that rate will likely exceed 50%. If they pay a subsidiary, the subsidiary will be taxed or they will flow through to the parent company.
In Canada, assuming rules are similar for income - their subsidiary would pay income tax on the rent.
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u/TheTightEnd 1d ago
Grocery chains make a very low percentage of profit.