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> Retail business do not earn 2-4% profit margins because they want to, they earn them because their customers will go to the store next door if they try to tak
by formerkrogemp 4y ago
> Retail business do not earn 2-4% profit margins because they want to, they earn them because their customers will go to the store next door if they try to take 5%+.
Have you seen Home Depot's and Lowe's profit margins? Consistently 5-9% for decades. Kroger, Walmart, and target all earn 1-3%. They hardly ever earn 4% nowadays. Perhaps after all of the cashiers and stockers are automated or made redundant. They are all heavily investing in automation, delivery, pickup, and supply chain tech.
- lotsofpulp 4y agoHome Depot/Lowes are good counterexamples of retail where profit margins are increasing, and some of it is surely due to them killing the competition and being in a high barrier to entry retail sector. https://www.macrotrends.net/stocks/charts/HD/home-depot/profit-margins https://www.macrotrends.net/stocks/charts/HD/home-depot/prof... https://www.macrotrends.net/stocks/charts/LOW/lowes/profit-margins https://www.macrotrends.net/stocks/charts/LOW/lowes/profit-m... The logistics of selling the things Home Depot and Lowes sells is much harder to replicate than Target/Walmart/grocery retail, so the profit margins need to get bigger before a competitor will want to invest in the market due to the higher risks.