News for hackers. Stuff that matters.
Re:UK: Food inflation rises to 18.2% as it hits highest rate... by prewett on Friday March 24, 2023 @03:21PM (#35294156)
Grocers are typically a commodity business, one feature of which is that the companies do not have pricing power. So unless the grocers have increased their net profit margins, I don't think evil-powerful-corpos is a tenable answer. It's a nice simple, market-based answer that gives people someone to blame, but it's just wrong for grocers.

Target has a NET 2.6% profit margin, Walmart has 1.9%, which are on the low side of what you'd expect for a sustainable commodity business. Tesco appears to have a GROSS (not net: this is after cost of goods but before salaries, etc.) margin of 6.5% and Sainsbury's has 7.6%. [1] Obviously their net profit margin is going to be less. This is hardly a company with a huge pricing power dynamic. If you want to see that, look at Apple (24.5% NET margin), Coca-Cola (22.2% NET margin), Visa (50.3% NET margin). (Note however that Coca-Cola's customers are its bottlers and Visa's customers are merchants so their pricing power might be invisible to end consumers)

[1] https://finbox.com/OTCPK:JSNS.F/explorer/gp_margin

Re:UK: Food inflation rises to 18.2% as it hits highest rate... by jhallenworld on Friday March 24, 2023 @03:41PM (#35294401)
In the case of Walmart: it's 3.83% for Jan 23, low, but it is up 64% Y/Y.

Gross is 23.5%- it makes you wonder where all that money is going.. oh yeah, $9.85 B of stock buybacks.