3 ms·
Having options of places to go to pay essentially the same price doesn’t feel fine to me. We’ve got four major chains within a 5 minute drive and two very small
by voisin 4y ago
Having options of places to go to pay essentially the same price doesn’t feel fine to me. We’ve got four major chains within a 5 minute drive and two very small independents, and the prices at the chains are all within a few percent of each other unless you want to mix and match each week for the various items on sale. This would normally mean that the market had found the equilibrium price that eliminates excess profits but, like our telecom industry, there are record profits. The variety of options is just for show, masking the inherent price fixing by the oligopoly.
- bawolff 4y agoI mean, it seems pretty disputed that there actually is record profits. E.g. https://globalnews.ca/news/9098447/canada-inflation-grocers-profits/ https://globalnews.ca/news/9098447/canada-inflation-grocers-...
- voisin 4y agoThis link just shows that the profit margin hasn’t increased. Record high profits occur when record high sales occur even if the profit margin is constant. This link also only looks at gross margin - if revenues and gross profit increase, their fixed operating costs (rent for example is usually fixed for 10-20 years for grocers, or the site is owned by the grocer) are now spread over higher sales so their operating profit (EBIT or EBITDA) can increased dramatically.
- bawolff 4y ago> Record high profits occur when record high sales occur even if the profit margin is constant. Sure, but why would anyone call such a situation profiteering? Furthermore it seems unlikely that the amount of food canadians have eaten has changed significantly over the last few years. Its not like the population increased significantly.