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[–] -5 points 1 year ago* (19 children)

Beat out other grocery stores so prices drop to compete.

Grocery stores operate on extremely thin margins. There isn't much to cut either for the private store or the government store.

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  • [–] 16 points 1 year ago (8 children)

    That's not true, and they make money in lots of ways:

    • They sell the end cap and shelf space. That's why you see the cheap, simple stuff on the bottom shelves. To even show up in a store, a company has to pay to play. Think of it like the Google Play Store or Apple Store.
    • They get bulk discounts and contracts to sell stuff.

    Costco operates on thin margins because they make their money on the membership fees.

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  • [–] -3 points 1 year ago* (2 children)

    The other commenter brought up Kroger. A grocery store that operates on a 1.5% profit margin.

    That’s not true

    I don't know what to tell you. 1.5% profit margin is razor thin. There isn't anything to cut for the private stores or the government stores.

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  • [–] 0 points 1 year ago (1 child)

    What I'm saying is, they need to prove that because all that I'm saying is true.

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  • [–] -2 points 1 year ago*

    Kroger is a public company, the presented numbers are their financials. Everything you mention is part of how they squeeze out a measly 1.5% profit margin. There isn’t much to cut for the private store or the government store.

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  • [–] -4 points 1 year ago (3 children)

    That's not true, and they make money in lots of ways:

    You understand that the net profit of 1.5% includes all sales and all expenses, right? It's neat-o they're selling space in the store, but that's already factored in.

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  • [–] 10 points 1 year ago*

    That includeds executive pay packages too, right? I dont think whoever is runnung these is going to make $21 million/yr like the kroger CEO.

    That and the other blown out of sanity exec pay should help lower in store prices, even if the workers are making his proposed $30/hr wage.

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  • [–] 8 points 1 year ago (2 children)

    A bag of chips at one of the local groceries is $7, and it's smaller than it used to be.

    Everything is more expensive and smaller.

    If the private market can't do it at a profit without cutting corners or stiffing labor, then don't.

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  • [–] 11 points 1 year ago (4 children)

    Kroger says their gross margin in 2024 was 22.3% and their operating profit was 3.8 billion.

    The Kroger Co. - Kroger Reports Fourth Quarter and Full-Year 2024 Results Announces Guidance for 2025 https://share.google/aUYB1Wjkppj7l0qAA

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  • [–] 8 points 1 year ago* (2 children)

    Kroger's revenue is $150B, with a net income of $2.3B. That is a profit margin of.....1.5%. One-point-five percent profit.

    As I said, grocery stores operate on tiny margins. There isn’t much to cut either for the private store or the government store.

    gross margin in 2024 was 22.3%

    Gross margin is not profit, it only accounts for direct costs of the goods being sold. Hence why their profit is only 1.5%.

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  • [–] 3 points 1 year ago

    They have thin margine but very high turnover. It's not a business plan based on holding stock. The shelf space turns over multiple times per week. They may pay suppliers 30 days after selling to a consumer.

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