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Record profits in a period of inflation is not surprising. If the value of the Australian dollar halves, then a company doubling it's raw profit figures is rea

Record profits in a period of inflation is not surprising. If the value of the Australian dollar halves, then a company doubling it's raw profit figures is really just staying maintaining the same profits in real value.

justinclift 3y ago
If the value of the Australian dollar halves, and a company manages to double its raw profit figures... doesn't that still sound like price gouging? Why would their "maintaining the same profits in real value" be acceptable when no-one else in the end to end chain (producers, customers, etc) managed to in the situation.
- nradov 3y ago
  What is price gouging?
- Manuel_D 3y ago
  It's not price gouging: the value of currencies are almost certainly never going to return to their pre-pandemic levels. Price gouging typically refers to raising prices in a specific exceptional situation like a disaster. Inflation is not exceptional, it's happening worldwide (though more in some countries than others). It's also not a temporary. It's lasted years and even if inflation returns to 2% the prices are going to stay high. Again, if the value of currency halves and profits in raw curry terms doubles then profit in terms of real value has remained the same. If a company pays it's employees $30 and the value of currency halves, and it raises wages to $45 did they really raise wages? In raw terms, yes, but in real terms no. The value of wages has actually gone down.
ta1243 3y ago
Record profits as a percentage of revenue. The problem in Austrialia is a lack of competition, hence Woolworths can get a 5.9% profit compared with say Tesco in the UK with 3.8% profit (the UK having far more competition) Not only that but while demand is decreasing, profits are increasing. That's a ridiculous system and shows a broken market.
- Gigachad 3y ago
  Plenty of competitors have prepared to enter Australia, and then left after finding there is no money to be made. Too few people spread too far apart.
  - RugnirViking 3y ago
    it sounds a lot like there is plenty of money to be made from the figures parent is stating. Maybe it ought to be prased more like "unique logistical challenges" because clearly some few companies have made it work very well
  - justinclift 3y ago
    > Plenty of competitors have prepared to enter Australia, and then left after finding there is no money to be made. Explain ALDI?
lm28469 3y ago
Prices are rising because inflation because pricing are rising because inflation Smart.
- Manuel_D 3y ago
  Except that really is what happens. If the prices of your inputs increase, then you have to raise the prices of your goods. And then companies that use your goods isn't puts have to raise their prices, and so on. In terms of labor and wages, it's called a wage price spiral: https://en.m.wikipedia.org/wiki/Wage-price_spiral https://en.m.wikipedia.org/wiki/Wage-price_spiral Similar dynamics exist for physical goods.

justinclift 3y ago

If the value of the Australian dollar halves, and a company manages to double its raw profit figures... doesn't that still sound like price gouging? Why would their "maintaining the same profits in real value" be acceptable when no-one else in the end to end chain (producers, customers, etc) managed to in the situation.

nradov 3y ago
What is price gouging?
Manuel_D 3y ago
It's not price gouging: the value of currencies are almost certainly never going to return to their pre-pandemic levels. Price gouging typically refers to raising prices in a specific exceptional situation like a disaster. Inflation is not exceptional, it's happening worldwide (though more in some countries than others). It's also not a temporary. It's lasted years and even if inflation returns to 2% the prices are going to stay high. Again, if the value of currency halves and profits in raw curry terms doubles then profit in terms of real value has remained the same. If a company pays it's employees $30 and the value of currency halves, and it raises wages to $45 did they really raise wages? In raw terms, yes, but in real terms no. The value of wages has actually gone down.

ta1243 3y ago

Record profits as a percentage of revenue. The problem in Austrialia is a lack of competition, hence Woolworths can get a 5.9% profit compared with say Tesco in the UK with 3.8% profit (the UK having far more competition) Not only that but while demand is decreasing, profits are increasing. That's a ridiculous system and shows a broken market.

Gigachad 3y ago
Plenty of competitors have prepared to enter Australia, and then left after finding there is no money to be made. Too few people spread too far apart.
- RugnirViking 3y ago
  it sounds a lot like there is plenty of money to be made from the figures parent is stating. Maybe it ought to be prased more like "unique logistical challenges" because clearly some few companies have made it work very well
- justinclift 3y ago
  > Plenty of competitors have prepared to enter Australia, and then left after finding there is no money to be made. Explain ALDI?

lm28469 3y ago

Prices are rising because inflation because pricing are rising because inflation Smart.

Manuel_D 3y ago
Except that really is what happens. If the prices of your inputs increase, then you have to raise the prices of your goods. And then companies that use your goods isn't puts have to raise their prices, and so on. In terms of labor and wages, it's called a wage price spiral: https://en.m.wikipedia.org/wiki/Wage-price_spiral https://en.m.wikipedia.org/wiki/Wage-price_spiral Similar dynamics exist for physical goods.