Comment by volkl48
6 hours ago
Grocery stores infamously have some of the lowest margins in all of retail and typically hover in the 1-3% range. As a sector they have about zero room for inefficiency and have to be this aggressive about chasing operating cost reductions.
The increased profits that have occurred in recent decades have landed with the big food companies, not with the retail chains selling their products at very little margin.
Wonder the margins on those $9 boxes of Cheerios at major California grocers.
They did promise to increase the cost of breakfast a couple years ago.
Well, for whatever it's worth, I think the closest manufacturing facility for those would be in Iowa. They had a plant in California but it closed in 2015.
AKA, the decade where everyone bought way too much into the 'Just do JIT supply chain for the manufacturing location to warehouse tail and pretend we are Amazon' bullshit.
I put it that way because it is short-sighted to not consider that transportation costs will always increase over time (i.e. fuel prices, wages of drivers) and shipping a final product over that long of a distance (i.e. at least half of the country, and instead of shipping grain to process it is finished boxes which is less efficient for volume) and yet they made that choice.
Where it got nasty is that when the average consumer base decided it was fine to pay dealer markups on cars because of the parts issues that industry saw from their JIT shortsights, everyone saw dollar signs instead of a problem to fix.
Wonder the max price a company would be charged to ship a trailer of the largest boxes of Cheerios from say Maine to San Diego. Maybe fifty cents a box? You got me curious about the breakdown of the $9.