For those who don’t get the reference: Grocery stores have low margins. It’s the textbook example of a business that many assume is high margin and rolling in profits, but when you look at the numbers they have very poor profit margins.

I don't know if you'll be able to answer this but;

I've been wondering about that conventional wisdom lately. In my area, and in most of the developed world, the prices of frankly most food I buy has doubled in the last 7 years. Meat is almost quadruple. This is despite ~3% inflation yearly over that time (higher in covid years, lower elsewhere), for an aggregate inflation over that same period of 44%. So the costs are rising way faster than inflation. indeed, my pay has not doubled.

Lets assume that its true that supermarkets etc where I am report very low profit margins (I haven't personally checked, but I suspect they indeed do). Where does the increased cost go? The general excuses given are covid, ukraine, etc. But those are market explanations - i.e. oh, there is less supply of this stuff, so the price goes up. But that means that SOMEONE is making a lot more money than they used to -- or the amount of effort to make the same amount of product has gone up. So which is it?

Other explanations i've considered:

- Hollywood accounting i.e. the profit margin is much higher but funneled into weird supplier companies also owned by investors/higher ups of the supermarkets.

- Middleman bloat. A bunch of extra steps where people take their "small margin" repeatedly have been inserted into the supply chain, the same product now passing through more hands (combine if you like with the above if you like)

> Yeah margins in groceries are great.

On some definitely are. At least in Canada grocery stores can get better margins by not selling prunes which go from green to dry (or rotten) hile on shelf. Various fruits are sold at loos and I see why.

At the same time I don't think kind-of AAA beef sold for $55-$110CAD has bad margins.

Everything in groceries has bad margins. Grocery shops are not making the money, food conglomerates are making the money if you look at earnings.

Small grocery stores are going bankrupt, larger chains now all are becoming food conglomerates who also own the point of sale - so called "private label" is noted as a huge threat in the shareholder reports of traditionally large food companies - go to a whole foods, aside from a few high profile products like CocaCola its all in-house brand products

What kind of margin are we talking? e.g. Walmart groceries? I can't imagine it being >5%