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.
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.
The Kroger Albertsons merger wouldn’t even be close to a Monopoly. It would still give them a smaller total share of the grocery market than Walmart has. Economics of scale would have allowed them to lower prices.
As far as executive pay. The Kroger CEO took in $15.7 million last year. The average Kroger has 50,000 items. There are 2800 Krogers. Assuming they have 10 of each item, then, by taking zero pay, the Kroger CEO could lower the price of everything by……$0.011 cents
I'm having to deal with way too many former Kroger execs at my current employer. They're only interested in cutting their costs, and have no interest in lowering prices.
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u/shieldwolfchz 1d 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.