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I don't know why this is downvoted and I don't know why I didn't think of this comparison. I've lived in five different states and been to Walmarts and flipped

I don't know why this is downvoted and I don't know why I didn't think of this comparison. I've lived in five different states and been to Walmarts and flipped cars and the variance is EXACTLY like variance in DMVs in both QoS, clientele/employee demographics.

pengaru 5y ago
Right, the DMV has a monopoly on a service most adults require. There are competitors for simple services like registration renewal @ AAA, but that's less available in smaller communities. So when you go to a DMV somewhere there's only one DMV serving the region, it's a pretty good cross-section of local society. Another interesting window in this vein is the local courthouse. The smaller towns don't separate out traffic violations from everything else, it's all on display handled in one room. You can get a sense of what's going on and the type of people in a given small town rather quickly this way. When there's just one grocer serving a given area, it's effectively the same situation. But when competition eventually arrives, I think they tend to quickly divide along class boundaries. Around here there's only one grocery store in my local town, and as a result it's actually pretty decent. The exact same chain has a very similar store in a significantly larger town ~25 miles away, where there's a competing upper-class grocer in the adjacent lot. The effect is devastating on the mediocre chain. Customers are treated poorly, the place is a filthy mess, cashiers aren't even trusted enough to manually enter prices when a barcode won't scan. The contrast is shocking, just next door in the higher end grocer none of these problems are experienced, but the prices are slightly higher.
- mc32 5y ago
  Profit per dollar for grocery stores is about half of one cent for every dollar of revenue. Shrinkage eats into that profit very quickly. This is why Walgreens is closing stores in SF. They cannot survive with the rampant unprosecuted shoplifting in SF.
  - ipaddr 5y ago
    That profit margin sounds very off. Is there a reference you are using to determine that? For an average $200 bill the store makes 1 dollar?
    - mc32 5y ago
      Depends on the outfit, some are better than others, but this source[1] puts the ave at 2.2%. I knew an mgr at one of these and they told me 0.5% to 1%. [1]https://smallbusiness.chron.com/profit-margin-supermarket-22467.html https://smallbusiness.chron.com/profit-margin-supermarket-22...
    - mgkimsal 5y ago
      Every time I hear people talking about "grocery store margins" the numbers get smaller and smaller, and I suspect "Hollywood accounting" may be behind some of the numbers people are thinking/repeating. I can say some of the shops around here have always been pricey, but a Lidl came in to town and manages to undercut every other store by around 30% on pretty much every comparable item. Overall, stores making 0.5% profit simply doesn't add up. We've got more new chains moving in to the area, existing stores moving (merely half a mile away for access to better demographics), and this is all costing tens of millions in construction alone. Note: I realize that other regions may have store closures to balance this out too - some areas boom, others shrink. I can not believe multi-billion companies would be putting up tens/hundreds of millions to chase after these minuscule (and apparently shrinking) profit margins. Maybe I'm wrong. Or perhaps this meme of "grocery stores never make a profit!" is wrong, or at least overblown. A quick check up of a regional store indicates their net profit is somewhere around 2.3% of sales volume - not stellar, but not terribly close to 0.5% either. EDIT: bit more info/breakdown on the subject: https://thegrocerystoreguy.com/what-is-the-profit-margin-for-grocery-stores/ https://thegrocerystoreguy.com/what-is-the-profit-margin-for... EDIT 2: FWIW, on your $200 example, the company making 'only' $1, it's probably more like $4-$5, but that's after all other expenses (labor, inventory, insurance, advertising, etc) is factored in.
      - lotsofpulp 5y ago
porknubbins 5y ago
I was going to say Walmart has exactly the feel of a US public institution like a prison, DMV, immigration and customs etc. You can get a good deal but as soon as any human effort to provide service is required all bets are off, and the whole place feels vaguely hostile.

pengaru 5y ago

Right, the DMV has a monopoly on a service most adults require. There are competitors for simple services like registration renewal @ AAA, but that's less available in smaller communities. So when you go to a DMV somewhere there's only one DMV serving the region, it's a pretty good cross-section of local society. Another interesting window in this vein is the local courthouse. The smaller towns don't separate out traffic violations from everything else, it's all on display handled in one room. You can get a sense of what's going on and the type of people in a given small town rather quickly this way. When there's just one grocer serving a given area, it's effectively the same situation. But when competition eventually arrives, I think they tend to quickly divide along class boundaries. Around here there's only one grocery store in my local town, and as a result it's actually pretty decent. The exact same chain has a very similar store in a significantly larger town ~25 miles away, where there's a competing upper-class grocer in the adjacent lot. The effect is devastating on the mediocre chain. Customers are treated poorly, the place is a filthy mess, cashiers aren't even trusted enough to manually enter prices when a barcode won't scan. The contrast is shocking, just next door in the higher end grocer none of these problems are experienced, but the prices are slightly higher.

mc32 5y ago
Profit per dollar for grocery stores is about half of one cent for every dollar of revenue. Shrinkage eats into that profit very quickly. This is why Walgreens is closing stores in SF. They cannot survive with the rampant unprosecuted shoplifting in SF.
- ipaddr 5y ago
  That profit margin sounds very off. Is there a reference you are using to determine that? For an average $200 bill the store makes 1 dollar?
  - mc32 5y ago
    Depends on the outfit, some are better than others, but this source[1] puts the ave at 2.2%. I knew an mgr at one of these and they told me 0.5% to 1%. [1]https://smallbusiness.chron.com/profit-margin-supermarket-22467.html https://smallbusiness.chron.com/profit-margin-supermarket-22...
  - mgkimsal 5y ago
    Every time I hear people talking about "grocery store margins" the numbers get smaller and smaller, and I suspect "Hollywood accounting" may be behind some of the numbers people are thinking/repeating. I can say some of the shops around here have always been pricey, but a Lidl came in to town and manages to undercut every other store by around 30% on pretty much every comparable item. Overall, stores making 0.5% profit simply doesn't add up. We've got more new chains moving in to the area, existing stores moving (merely half a mile away for access to better demographics), and this is all costing tens of millions in construction alone. Note: I realize that other regions may have store closures to balance this out too - some areas boom, others shrink. I can not believe multi-billion companies would be putting up tens/hundreds of millions to chase after these minuscule (and apparently shrinking) profit margins. Maybe I'm wrong. Or perhaps this meme of "grocery stores never make a profit!" is wrong, or at least overblown. A quick check up of a regional store indicates their net profit is somewhere around 2.3% of sales volume - not stellar, but not terribly close to 0.5% either. EDIT: bit more info/breakdown on the subject: https://thegrocerystoreguy.com/what-is-the-profit-margin-for-grocery-stores/ https://thegrocerystoreguy.com/what-is-the-profit-margin-for... EDIT 2: FWIW, on your $200 example, the company making 'only' $1, it's probably more like $4-$5, but that's after all other expenses (labor, inventory, insurance, advertising, etc) is factored in.
    - lotsofpulp 5y ago

porknubbins 5y ago

I was going to say Walmart has exactly the feel of a US public institution like a prison, DMV, immigration and customs etc. You can get a good deal but as soon as any human effort to provide service is required all bets are off, and the whole place feels vaguely hostile.