4 ms·

Truly shows how Free Markets are the most efficient

by derelicta 3y ago

jiofj 3y ago
That's nice if we forget about the ECB printing money like there's no tomorrow.
- dangerwill 3y ago
  Capitalism can't fail it can only be failed
- ta1243 3y ago
  Which explains why inflation in countires like Belgium, Spain, Denmark, Luxembourg are all under 2.5% as they famously don't use the Euro.
  - jiofj 3y ago
    As someone in Spain: those numbers are absolutely fake.
    - Infinitesimus 3y ago
      (That's the point they're trying to make btw)
    - midasuni 3y ago
      I obe it when something doesn’t fit a narrative so it’s decried as “fake news”
  - wiredfool 3y ago
    Denmark, yes, but the others use the euro.
    - manmal 3y ago
      I think GP was being sarcastic.
    - deleted 3y ago
      [deleted]
    - MandieD 3y ago
      The DKK is loosely coupled with the Euro: https://en.m.wikipedia.org/wiki/Denmark_and_the_euro https://en.m.wikipedia.org/wiki/Denmark_and_the_euro
- lxgr 3y ago
  That could be an explanation if the entire Eurozone were affected uniformly by inflation. It's not, though, and Austria is seeing the highest levels. A big contribution to this is the government's policy of heavily subsidizing various costs: Energy, rent, even groceries were subsidized via various vouchers and payments for a while, and now there's even discussions of "capping interest rates" – of course inflation won't go down if the purchasing power remains inflated! Note that I'm not concluding that this is necessarily a bad development: It might just be an effective way of redistribution – but only time will tell, and personally I'm glad to not be part of the experiment.
FirmwareBurner 3y ago
If food and housing gets too expensive, then sorry mate, nothing we can do about it, that's just how the free market™ works, try working harder. But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".
- scrollaway 3y ago
  I dunno, sounds more like a problem with the news you read. Here, inflation and the price of groceries makes the front page on a very regular basis.
- CTDOCodebases 3y ago
  Then when wages do come down and questions get put to politicians and the central bankers about the lack of wage growth they shrug their shoulders and act confused like it's some unsolvable math problem.
- iraqmtpizza 3y ago
  have you ever tried building a house? it's one of the least free markets there is. the quickest way to get arrested is to buy cheap land and start putting up houses willy nilly
  - FirmwareBurner 3y ago
    >have you ever tried building a house? it's one of the least free markets there is. The "free market" in the context of housing was meant in a satirical way hence the TM symbol. Of course that market is 100% fixed by design but we get parroted the story where it's 100% "free" as if the government has no control over the levers that wholly impact it's pricing (zoning and building regulations, immigration, interest rates, banking and loan duration regulations, banning overseas investors, banning AirBnBs, property taxes, etc)
    - 3y ago
helpfulContrib 3y ago
A majority of the food brands in Austria lead directly back to Nestlé ..
- beebeepka 3y ago
  It's almost the same here in Bulgaria. Been doing my best to avoid their products but they managed to buy a ton local companies over the years.
lotsofpulp 3y ago
What are the profit margins for Austrian retailers? In the US, all the retailers earn razor thin profit margins (except Home Depot/Lowes), indicating if prices were lower, the businesses would fail, or at best become charities. Edit: for the one Austrian retailer I could find numbers for, they are not pretty. Not sure how the retailer can lower prices without going out of business if they already have sub 1% profit margins. https://news.ycombinator.com/item?id=37534333 https://news.ycombinator.com/item?id=37534333
- deleted 3y ago
  [deleted]
- lxgr 3y ago
  We're talking about grocery stores here, not just general retailers. I have a really hard time believing that US grocery stores are operating on razor-thin margins here, given how extremely expensive groceries are (when adjusting for income, other cost of living etc.) compared to e.g. Germany. One problem of the Austrian grocery store market is that there's just way too many branches per capita (compared to the otherwise pretty similar market of Germany again), which brings down margins.
  - lotsofpulp 3y ago
    It is all public information. Plus, logically, it is a low barrier to entry business with zero moat. There are lots of sellers willing to sell for barely above cost. These are the two biggest grocery only retailers in the US: https://www.macrotrends.net/stocks/charts/KR/kroger/profit-margins https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m... https://www.macrotrends.net/stocks/charts/ACI/albertsons/profit-margins https://www.macrotrends.net/stocks/charts/ACI/albertsons/pro... This is the single biggest grocery retailer in the US, but not solely grocery: https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr... Costco obviously moves a ton of groceries. https://www.macrotrends.net/stocks/charts/COST/costco/profit-margins https://www.macrotrends.net/stocks/charts/COST/costco/profit... Target now sells a wide range of groceries in all of its stores too: https://www.macrotrends.net/stocks/charts/TGT/target/net-profit-margin https://www.macrotrends.net/stocks/charts/TGT/target/net-pro...

Truly shows how Free Markets are the most efficient

jiofj 3y ago

That's nice if we forget about the ECB printing money like there's no tomorrow.

dangerwill 3y ago
Capitalism can't fail it can only be failed
ta1243 3y ago
Which explains why inflation in countires like Belgium, Spain, Denmark, Luxembourg are all under 2.5% as they famously don't use the Euro.
- jiofj 3y ago
  As someone in Spain: those numbers are absolutely fake.
  - Infinitesimus 3y ago
    (That's the point they're trying to make btw)
  - midasuni 3y ago
    I obe it when something doesn’t fit a narrative so it’s decried as “fake news”
- wiredfool 3y ago
  Denmark, yes, but the others use the euro.
  - manmal 3y ago
    I think GP was being sarcastic.
  - deleted 3y ago
    [deleted]
  - MandieD 3y ago
    The DKK is loosely coupled with the Euro: https://en.m.wikipedia.org/wiki/Denmark_and_the_euro https://en.m.wikipedia.org/wiki/Denmark_and_the_euro
lxgr 3y ago
That could be an explanation if the entire Eurozone were affected uniformly by inflation. It's not, though, and Austria is seeing the highest levels. A big contribution to this is the government's policy of heavily subsidizing various costs: Energy, rent, even groceries were subsidized via various vouchers and payments for a while, and now there's even discussions of "capping interest rates" – of course inflation won't go down if the purchasing power remains inflated! Note that I'm not concluding that this is necessarily a bad development: It might just be an effective way of redistribution – but only time will tell, and personally I'm glad to not be part of the experiment.

FirmwareBurner 3y ago

If food and housing gets too expensive, then sorry mate, nothing we can do about it, that's just how the free market™ works, try working harder. But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".

scrollaway 3y ago
I dunno, sounds more like a problem with the news you read. Here, inflation and the price of groceries makes the front page on a very regular basis.
CTDOCodebases 3y ago
Then when wages do come down and questions get put to politicians and the central bankers about the lack of wage growth they shrug their shoulders and act confused like it's some unsolvable math problem.
iraqmtpizza 3y ago
have you ever tried building a house? it's one of the least free markets there is. the quickest way to get arrested is to buy cheap land and start putting up houses willy nilly
- FirmwareBurner 3y ago
  >have you ever tried building a house? it's one of the least free markets there is. The "free market" in the context of housing was meant in a satirical way hence the TM symbol. Of course that market is 100% fixed by design but we get parroted the story where it's 100% "free" as if the government has no control over the levers that wholly impact it's pricing (zoning and building regulations, immigration, interest rates, banking and loan duration regulations, banning overseas investors, banning AirBnBs, property taxes, etc)
  - 3y ago

helpfulContrib 3y ago

A majority of the food brands in Austria lead directly back to Nestlé ..

beebeepka 3y ago
It's almost the same here in Bulgaria. Been doing my best to avoid their products but they managed to buy a ton local companies over the years.

lotsofpulp 3y ago

What are the profit margins for Austrian retailers? In the US, all the retailers earn razor thin profit margins (except Home Depot/Lowes), indicating if prices were lower, the businesses would fail, or at best become charities. Edit: for the one Austrian retailer I could find numbers for, they are not pretty. Not sure how the retailer can lower prices without going out of business if they already have sub 1% profit margins. https://news.ycombinator.com/item?id=37534333 https://news.ycombinator.com/item?id=37534333

deleted 3y ago
[deleted]
lxgr 3y ago
We're talking about grocery stores here, not just general retailers. I have a really hard time believing that US grocery stores are operating on razor-thin margins here, given how extremely expensive groceries are (when adjusting for income, other cost of living etc.) compared to e.g. Germany. One problem of the Austrian grocery store market is that there's just way too many branches per capita (compared to the otherwise pretty similar market of Germany again), which brings down margins.
- lotsofpulp 3y ago
  It is all public information. Plus, logically, it is a low barrier to entry business with zero moat. There are lots of sellers willing to sell for barely above cost. These are the two biggest grocery only retailers in the US: https://www.macrotrends.net/stocks/charts/KR/kroger/profit-margins https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m... https://www.macrotrends.net/stocks/charts/ACI/albertsons/profit-margins https://www.macrotrends.net/stocks/charts/ACI/albertsons/pro... This is the single biggest grocery retailer in the US, but not solely grocery: https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr... Costco obviously moves a ton of groceries. https://www.macrotrends.net/stocks/charts/COST/costco/profit-margins https://www.macrotrends.net/stocks/charts/COST/costco/profit... Target now sells a wide range of groceries in all of its stores too: https://www.macrotrends.net/stocks/charts/TGT/target/net-profit-margin https://www.macrotrends.net/stocks/charts/TGT/target/net-pro...