Comment by lotsofpulp
1 day ago
Retail business profit margins have always been low single digit percentages. More staff can only mean higher prices. I'll gladly scan my own stuff to have lower prices and be able to get out quicker.
https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m...
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https://www.macrotrends.net/stocks/charts/WMT/walmart/profit...
https://www.macrotrends.net/stocks/charts/COST/costco/profit...
https://www.macrotrends.net/stocks/charts/TGT/target/profit-...
> Retail business profit margins have always been low single digit percentages.
And yet overall profits remain high - they’re high-volume low margin businesses.
> More staff can only mean higher prices.
When you’re talking about massive chains that are prioritizing profits, usually on behalf of shareholders, that is true. For smaller businesses, coops, or even gov run grocery stores - things that aren’t as focussed on rates of return for investors - it can just mean less profits for the owners.
> I'll gladly scan my own stuff to have lower prices and be able to get out quicker.
It hasn’t matched my experience that prices fell as self checkouts were installed. I think profits went up, prices didn’t come down. Maybe the “quicker” bit… except only if I have just a handful of items.
> And yet overall profits remain high - they’re high-volume low margin businesses.
Why would they not be high? The purchasing power of the currency goes down day after day. If nominal profits are not hitting highs day after day, then you are losing purchasing power.
> It hasn’t matched my experience that prices fell as self checkouts were installed. I think profits went up, prices didn’t come down.
Profit margin is the relevant metric to look at for this context. It is possible prices would have gone up 10% instead of 5% if not for the automation. It is also possible the automation fails to reduce costs.
There are no guarantees in life, just bets that may or may not pan out. Long term trends will the story, but for now, the profit margins make me happy that I don’t invest in grocery stores.