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Not necessarily, they could potentially reduce profit margin instead. Edit: Or reduce employee count. Give more money to less people.

jbrun 4y ago
lol
robertlagrant 4y ago
All those billionaire grocery store owners just raking it in.
- zingplex 4y ago
  I'm not sure if you're being sarcastic or not, but in case you are, here's a story from Canada https://www.theglobeandmail.com/business/article-loblaw-profit-jumps-nearly-40-even-as-inflation-drives-up-costs-for/ https://www.theglobeandmail.com/business/article-loblaw-prof...
sigstoat 4y ago
https://www.aei.org/carpe-diem/the-public-thinks-the-average-company-makes-a-36-profit-margin-which-is-about-5x-too-high-part-ii/ https://www.aei.org/carpe-diem/the-public-thinks-the-average... "For the general retail sector, the average profit margin is only 2.3% and for the grocery and food retail industry, it’s even lower at only 1.6%."
- bayesian_horse 4y ago
  Which means it's a shitty career / sector to be in. There also is a cost to capital, in the form of return on investment (another way to say profit). So in those cases, to pay higher wages, the retail sector would have to raise consumer prices. If they were to decrease ROI, the capital would run away and rather invest in something else. They will only raise wages and prices if that is the only way to have enough labor to handle their business. Even then, higher prices means lower demand. No free lunch.
  - carapace 4y ago
    https://rainbow.coop/ https://rainbow.coop/ https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative Rainbow Grocery Cooperative is a worker-owned and run food cooperative located in San Francisco, California. Founded in 1975
    - bayesian_horse 4y ago
      Worker-owned just means workers are both labor and capital. Those projects often have higher prices overall.
      - carapace 4y ago
        Rainbow's prices are competitive, at least they've been in business for about a century and don't seem in any danger of closing. The point is that without investors expecting a return there's no ROI. Grocery stores can pay a living wage without gouging customers and without investors. It seemed to me that you might have been implying that without investors there couldn't be grocery stores. Another factor to consider is that wages and profit returned to the workers will tend to stay in the local economy longer, contrasted with ROI which typically would be stored in other investments?
        bayesian_horse 4y ago
        I'm sure if you look closer you'll find that those workers do have some capital bound in the business and that is earning at best a modest return because you have to sum up wage and rent. Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. That won't be these worker-owned businesses. And the market capacity for such companies seems to be quite small.
        carapace 4y ago
        > 'm sure if you look closer you'll find that those workers do have some capital bound in the business ... Like what? You'll have to forgive me but I'm not very sophisticated when it comes to economics. > ... that is earning at best a modest return So what? Rainbow Grocery isn't an investment vehicle, it's just people coming together to make a grocery store. That's my point: not everything has to be an investment. We can have grocery stores w/o ROI, that charge reasonable prices and pay a living wage. > Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. Sure! That's the beauty of the capitalist system (I'm pro-capitalist FWIW, I just don't think it is necessarily the best economic modality for every business. The way I put it is, "Capitalism as a tool, an economic API, not an ideology.") > That won't be these worker-owned businesses. Exactly! > And the market capacity for such companies seems to be quite small. Again, so what? These kinds of businesses generally are not trying to aggressively expand (although some do, like REI, the outdoor equipment stores.) Just to reiterate, it sounded to me like you were saying that without ROI we wouldn't have grocery stores, and I just wanted to point out that we can have grocery stores with good prices and good wages and no investors or appreciable ROI.
claytongulick 4y ago
You realize that grocery stores have some of the smallest margins, on average, of any business at around 2.2%? [1] What do you expect them to reduce that to? With margins that low, don't you think they are already very focused on operating with the absolute minimum number of employees they need? A friend of mine managed a very busy grocery store for years. It's an extraordinarily difficult business. Many grocery store chains treat their employees very well, they provide good salaries and training programs. It's one of the few businesses left where you can start out as a bagger and work your way up to senior manager, with all costs paid by the store. Other than inventory cost, this is their highest cost. Would you have them change it? [1] https://thegrocerystoreguy.com/what-is-the-profit-margin-for-grocery-stores/ https://thegrocerystoreguy.com/what-is-the-profit-margin-for...
- adrianN 4y ago
  Without knowing what fraction of their costs are wages you can't give a meaningful answer. If 100% if their costs are wages they obviously can't raise wages more than 2.2% without going bankrupt. If 1% of their costs are wages they can double them without meaningfully affecting their profit margins.
  - claytongulick 4y ago
    LMGTFY: it's between 9-14% [1] https://www.ncr.com/blogs/retail/supermarkets-turn-to-technology-to-manage-grocery-costs https://www.ncr.com/blogs/retail/supermarkets-turn-to-techno...
    - AstralStorm 4y ago
      Which means they're exposed to any material costs a lot. So, when a company like BP or Shell raises fuel price by 33%, they're forced to match it or maybe try to get more things sourced locally, cut out middlemen - rather hard. Usually they'll raise the price a bit more further.

jbrun 4y ago

lol

robertlagrant 4y ago

All those billionaire grocery store owners just raking it in.

zingplex 4y ago
I'm not sure if you're being sarcastic or not, but in case you are, here's a story from Canada https://www.theglobeandmail.com/business/article-loblaw-profit-jumps-nearly-40-even-as-inflation-drives-up-costs-for/ https://www.theglobeandmail.com/business/article-loblaw-prof...

sigstoat 4y ago

https://www.aei.org/carpe-diem/the-public-thinks-the-average-company-makes-a-36-profit-margin-which-is-about-5x-too-high-part-ii/ https://www.aei.org/carpe-diem/the-public-thinks-the-average... "For the general retail sector, the average profit margin is only 2.3% and for the grocery and food retail industry, it’s even lower at only 1.6%."

bayesian_horse 4y ago
Which means it's a shitty career / sector to be in. There also is a cost to capital, in the form of return on investment (another way to say profit). So in those cases, to pay higher wages, the retail sector would have to raise consumer prices. If they were to decrease ROI, the capital would run away and rather invest in something else. They will only raise wages and prices if that is the only way to have enough labor to handle their business. Even then, higher prices means lower demand. No free lunch.
- carapace 4y ago
  https://rainbow.coop/ https://rainbow.coop/ https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative https://en.wikipedia.org/wiki/Rainbow_Grocery_Cooperative Rainbow Grocery Cooperative is a worker-owned and run food cooperative located in San Francisco, California. Founded in 1975
  - bayesian_horse 4y ago
    Worker-owned just means workers are both labor and capital. Those projects often have higher prices overall.
    - carapace 4y ago
      Rainbow's prices are competitive, at least they've been in business for about a century and don't seem in any danger of closing. The point is that without investors expecting a return there's no ROI. Grocery stores can pay a living wage without gouging customers and without investors. It seemed to me that you might have been implying that without investors there couldn't be grocery stores. Another factor to consider is that wages and profit returned to the workers will tend to stay in the local economy longer, contrasted with ROI which typically would be stored in other investments?
      - bayesian_horse 4y ago
        I'm sure if you look closer you'll find that those workers do have some capital bound in the business and that is earning at best a modest return because you have to sum up wage and rent. Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. That won't be these worker-owned businesses. And the market capacity for such companies seems to be quite small.
        carapace 4y ago
        > 'm sure if you look closer you'll find that those workers do have some capital bound in the business ... Like what? You'll have to forgive me but I'm not very sophisticated when it comes to economics. > ... that is earning at best a modest return So what? Rainbow Grocery isn't an investment vehicle, it's just people coming together to make a grocery store. That's my point: not everything has to be an investment. We can have grocery stores w/o ROI, that charge reasonable prices and pay a living wage. > Once somebody earns somewhat more than their subsistence wage, they want to invest it into something that brings a return. Sure! That's the beauty of the capitalist system (I'm pro-capitalist FWIW, I just don't think it is necessarily the best economic modality for every business. The way I put it is, "Capitalism as a tool, an economic API, not an ideology.") > That won't be these worker-owned businesses. Exactly! > And the market capacity for such companies seems to be quite small. Again, so what? These kinds of businesses generally are not trying to aggressively expand (although some do, like REI, the outdoor equipment stores.) Just to reiterate, it sounded to me like you were saying that without ROI we wouldn't have grocery stores, and I just wanted to point out that we can have grocery stores with good prices and good wages and no investors or appreciable ROI.

claytongulick 4y ago

You realize that grocery stores have some of the smallest margins, on average, of any business at around 2.2%? [1] What do you expect them to reduce that to? With margins that low, don't you think they are already very focused on operating with the absolute minimum number of employees they need? A friend of mine managed a very busy grocery store for years. It's an extraordinarily difficult business. Many grocery store chains treat their employees very well, they provide good salaries and training programs. It's one of the few businesses left where you can start out as a bagger and work your way up to senior manager, with all costs paid by the store. Other than inventory cost, this is their highest cost. Would you have them change it? [1] https://thegrocerystoreguy.com/what-is-the-profit-margin-for-grocery-stores/ https://thegrocerystoreguy.com/what-is-the-profit-margin-for...

adrianN 4y ago
Without knowing what fraction of their costs are wages you can't give a meaningful answer. If 100% if their costs are wages they obviously can't raise wages more than 2.2% without going bankrupt. If 1% of their costs are wages they can double them without meaningfully affecting their profit margins.
- claytongulick 4y ago
  LMGTFY: it's between 9-14% [1] https://www.ncr.com/blogs/retail/supermarkets-turn-to-technology-to-manage-grocery-costs https://www.ncr.com/blogs/retail/supermarkets-turn-to-techno...
  - AstralStorm 4y ago
    Which means they're exposed to any material costs a lot. So, when a company like BP or Shell raises fuel price by 33%, they're forced to match it or maybe try to get more things sourced locally, cut out middlemen - rather hard. Usually they'll raise the price a bit more further.