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What options do the companies have:' - raise prices, which irritates customers, and collect record profits - keep prices the same, leading to shortages which

What options do the companies have:' - raise prices, which irritates customers, and collect record profits - keep prices the same, leading to shortages which also irritates customers, and collect mediocre profits

mgh2 4y ago
Rise prices in pace with inflation, not hike past it...
- FinNerd 4y ago
  A market like groceries is so cutthroat and low margin that this would basically be impossible.
- handmodel 4y ago
  This is the report the article cites https://www.accountable.us/wp-content/uploads/2022/04/2022-04-04-Largest-US-Retailers-2021-Profits-FINAL.pdf https://www.accountable.us/wp-content/uploads/2022/04/2022-0... The report is not very well reasoned in my opinion. It appears mostly just to be against inflation in general since the definition of inflation is the price that ordinary consumers pay for goods at ordinary stores. If the article said "general inflation is 8% but wal-mart raised its prices 15% in areas with no competition" I would get that and be mad - but the report doesn't even say the price increase at these stores. It just cites the total increase in profits (without specifying if this is due to more total revenue, high profit margin, or lower costs) The only exception I can see in the entire report is that Costco rose prices 5% - which actually seems less than inflation.
  - tyrfing 4y ago
    A lot of companies have seen margin expansion since the pandemic, supply/demand has been way out of balance and their input costs have forced price increases anyway. Using these retailers as examples and quoting profits in absolute terms is dishonest though, they were massive benefactors of policy recently and grew in absolute terms, with percent margins being much more mixed. Lockdowns drove business to them by shutting down competitors, easy monetary policy favors them, and they are the ecommerce winners. There are lots of B&M and other consumer companies that have been crushed recently, Kohl's being one easy example. It's very likely we'll see their margins drop over the next year. Predicting inflation is just about impossible, but prices are likely to keep going up, and future price hikes won't be into the sort of consumer spending strength that was the case last year.

mgh2 4y ago

Rise prices in pace with inflation, not hike past it...

FinNerd 4y ago
A market like groceries is so cutthroat and low margin that this would basically be impossible.
handmodel 4y ago
This is the report the article cites https://www.accountable.us/wp-content/uploads/2022/04/2022-04-04-Largest-US-Retailers-2021-Profits-FINAL.pdf https://www.accountable.us/wp-content/uploads/2022/04/2022-0... The report is not very well reasoned in my opinion. It appears mostly just to be against inflation in general since the definition of inflation is the price that ordinary consumers pay for goods at ordinary stores. If the article said "general inflation is 8% but wal-mart raised its prices 15% in areas with no competition" I would get that and be mad - but the report doesn't even say the price increase at these stores. It just cites the total increase in profits (without specifying if this is due to more total revenue, high profit margin, or lower costs) The only exception I can see in the entire report is that Costco rose prices 5% - which actually seems less than inflation.
- tyrfing 4y ago
  A lot of companies have seen margin expansion since the pandemic, supply/demand has been way out of balance and their input costs have forced price increases anyway. Using these retailers as examples and quoting profits in absolute terms is dishonest though, they were massive benefactors of policy recently and grew in absolute terms, with percent margins being much more mixed. Lockdowns drove business to them by shutting down competitors, easy monetary policy favors them, and they are the ecommerce winners. There are lots of B&M and other consumer companies that have been crushed recently, Kohl's being one easy example. It's very likely we'll see their margins drop over the next year. Predicting inflation is just about impossible, but prices are likely to keep going up, and future price hikes won't be into the sort of consumer spending strength that was the case last year.