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Your analysis of food price increases "in the last few years" doesn't mention the worst financial crises the country has faced in (at least) 80 years and the ef

by mthoms 2y ago

Your analysis of food price increases "in the last few years" doesn't mention the worst financial crises the country has faced in (at least) 80 years and the effect it had on inflation. It also doesn't mention the record corporate profits being recorded in several sectors. The profit margin of our largest grocery chain actually increased 50% during Covid for instance. Instead, your analysis is simply: "Government bad!" Don't get me wrong. I'm not saying the government isn't a very large part of the problem (ie for increasing the money supply and a lot of the things you mentioned) but to try and explain what happened to food prices without even mentioning Covid, or record corporate profits, is extremely disingenuous. But damn those "economically illiterate" serfs complaining about high prices, eh?

hollerith 2y ago
>The profit margin of our largest grocery chain actually increased 50% That's not exactly a strong indictment: when the average margin for the industry is about 1%, all kinds of things are going to cause this or that industry participant's margin to fluctuate up or down by a factor of 50%, i.e., to go down to 0.5% or up to 2%. It's not the same thing as Apple's margins, which last time I checked 12 years ago or so hovered around 33%, so if they went up by 50% (i.e., to 50%) it would mean something (at least if they stayed at that high for many years, which BTW you have not mentioned whether the largest grocery chain's did).
- mthoms 2y ago
  Except we're talking about Covid. When all input costs were skyrocketing (according to the grocers themselves). Accordingly, there were no magical cost-saying measures or new efficiencies unleashed. That tracks with their financial statements (no new efficiencies). So, the only way to increase profit margin when input costs are rising is to raise prices more than your costs are rising. As an aside... Loblaw's margin is upwards of 3.7% not 1%. Before Covid it was around 2% (give or take) for over a half century. The grocery industry may have low margins but they were remarkably stable. Until Covid.

by mthoms 2y ago

hollerith 2y ago

>The profit margin of our largest grocery chain actually increased 50% That's not exactly a strong indictment: when the average margin for the industry is about 1%, all kinds of things are going to cause this or that industry participant's margin to fluctuate up or down by a factor of 50%, i.e., to go down to 0.5% or up to 2%. It's not the same thing as Apple's margins, which last time I checked 12 years ago or so hovered around 33%, so if they went up by 50% (i.e., to 50%) it would mean something (at least if they stayed at that high for many years, which BTW you have not mentioned whether the largest grocery chain's did).

mthoms 2y ago
Except we're talking about Covid. When all input costs were skyrocketing (according to the grocers themselves). Accordingly, there were no magical cost-saying measures or new efficiencies unleashed. That tracks with their financial statements (no new efficiencies). So, the only way to increase profit margin when input costs are rising is to raise prices more than your costs are rising. As an aside... Loblaw's margin is upwards of 3.7% not 1%. Before Covid it was around 2% (give or take) for over a half century. The grocery industry may have low margins but they were remarkably stable. Until Covid.