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What does the price of a cone in relation to the price of a burger have to do with a cone being a loss leader or not? The price of a burger has absolutely nothi
by foerbert 5y ago
What does the price of a cone in relation to the price of a burger have to do with a cone being a loss leader or not? The price of a burger has absolutely nothing to do with their costs on the cone.
If the cone is profitable to sell, then it's not a loss leader and they have every incentive to sell as many of them as they can.
- tmellon2 5y agoThe cone is not profitable at about 25 to 30 Cents US (including local taxes) in international markets - where dairy ingredients, stable electricity and store front rental in a fancy location are expensive. The burgers (about $2.50 USD) on the other hand rake in 100-200 % profits. Regular Coke sells at about $1 USD; again comparable to US market prices.
- jldugger 5y ago> dairy ingredients, stable electricity and store front rental in a fancy location are expensive Two of those three are not really marginal costs. Yes, it costs electricity to make the food, but _stable_ electricity is something you already need in the biz, same as rent. If you need a generator, you already have one. Also, enlighten me: are markets where electricity grids are unstable the same ones where retail space is expensive?