Quote:
Originally Posted by iggy_oi
I don’t know how accurate the graph is but I think it’s a bit of a stretch to say that any increase is based solely or even primarily on non-grocery product sales. Sobeys, Safeway, Nofrills, Freshco, etc offer very little selection of non-grocery products.
Reported profit margins can also be manipulated based on investments and share buybacks, etc. I think it’d be a bit naive to assume that these companies are unintentionally running on such tight margins as their investors would probably take their money elsewhere if that were the case. When a grocery retailer invests $100M into building new stores or any other forms of expansion to their business those costs will come out of the overall profit, but the value of those fixed assets they acquired as part of their expansion do not show up as income.
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The bolded is 100% false. Reported profit margins take profits and revenues, that's it. Share buybacks and investments affect neither.
And nobody thinks they are intentionally running on tight margins - they're running on the highest margins they can get given their competitive position. Which is why the idea of a government grocer is asinine.
The problem with food inflation lately is mostly not a grocer issue, so mucking around with the grocery system isn't likely to fix it.