Mercado Central Purchases 40% Less

[PhilipDT]

Wholesale prices are always cheaper than retail- but thats because retailers actually do work for their money. They pay rent, utilities, and taxes, they pay gas and vehicle upkeep, they pay salaries and much more.
If you are saving 40% by buying wholesale, but then charging a "percentage" to drive, shop, sort, deliver, pay and collect, and so on, you are a retailer. Yes, you could do it cheaper than a store, since you wouldnt have rent, but it will still cost you something.
And its a lot of work taking orders each week, buying, sorting, and delivering, holding the bag when someone doesnt pay, and so on.
My guess is that, if you price too low, you wont do it for long, as you will find it too much work.
And if you price for what its worth, you wont be much cheaper than my neighborhood chino, which will sell me 1 liter of beer at ten at night.
convenience, to me, is worth a percentage too.

You can save 40% or more on most things in Argentina, if you are willing to go to the wholesaler, and buy in bulk. I just bought a whole bunch of underwear and shirts in Once, and, yes, I saved over 40% from the stores on Santa Fe for the same brand- but I had to buy quite a bit to get that discount. Worked for me, as I was buying for 4 people. But retail in BsAs works for a reason.

Except of the fact that retailers charge such diverse prices for goods that to consumers it feels like you're constantly getting fleeced. For example tonight I saw in barrio chino, at one of the large supermarkets, a pack of Philadelphia cream cheese for 55pesos. Down the street at coto it was 38; that's 44% higher! The other day I bought two bathroom scales off of mercadolibre for 150 pesos each. A similar scale at the grocery store cost 500 pesos. They store selling on mercado libre also had a store front with rent and taxes and other overhead. Where did that 350 pesos go?

The beef at coto is cheaper, the wine at disco is cheaper, the chicken at carrefour is cheaper. Should we all shop at each to find the cheapest prices?

Not to mention the whole you would be getting 30% off tonight if only you had such and such benefit card. I understand that retailers provide a service and charge for doing so but around here that mark up feels less like added value and more like taking advantage of an uninformed market.

 

[Rich One]

200 pesos for 20 kms?

Mercado Central is the live evidence that supermarkets are ripping us off.

You are correct its only $20 pesos for gas or 10 kmts per liter. So its $80 pesos per month for gas .

Question for Matias if a product sells for $100 pesos at the Mercado Central what should be the sales price of the product on a supermarket shelf considering all overheads taxes and advertising and logistics of a supermarket? If the supermarkets sells the Product for $140 . What is the net Profit Margin? In your opinion? Just one realistic number?

 

[thorsten]

Damn, Rich One, just accept the fact: THEY ARE RIPPING US OFF!!!

 

[Matiasba]

You are correct its only $20 pesos for gas or 10 kmts per liter. So its $80 pesos per month for gas .

Question for Matias if a product sells for $100 pesos at the Mercado Central what should be the sales price of the product on a supermarket shelf considering all overheads taxes and advertising and logistics of a supermarket? If the supermarkets sells the Product for $140 . What is the net Profit Margin? In your opinion? Just one realistic number?

from what I saw, the gain of the supermarket chains lots of times is over 100%. 100% of gain!!! remember, APART from costs, once they covered their costs, the gain they have is more than 100% in most cases. In their home countries, chains like carrefour gain less than 30%!!

Please, do me a favor and listen to this:

https://www.youtube....h?v=svSjIEPf4fw

https://www.youtube....h?v=3INs0GByyj4

https://www.youtube.com/watch?v=4uFi_b1xZFo

 

[thorsten]

You should consider calling AFIP: the balance sheets of super markets show way lower profit margins than 100%, so they are also cheating on taxes! Maybe C5N with their competent team can make a report about it.

 

[Dublin2BuenosAires]

You should consider calling AFIP: the balance sheets of super markets show way lower profit margins than 100%, so they are also cheating on taxes! Maybe C5N with their competent team can make a report about it.

I tried to find the Argentina specific p&l, I couldn't find it?

I found some vague statements from industry bodies suggesting that possibly supermarkets were overcharging in 2012 (i had a longer post, but the forum s/w chewed it up.

My suspicion is that the supermarkets have the arm up to their oxters.

 

[Matiasba]

Look, what Roberto Navarro is saying is totally true. Until the 90s in Buenos Aires we used to have minor "comerciaantes", the verdulero, that survived, the small grocery store, that couldnt make it, the carnicero, a very few survived, and a lot of other small shop keepers. They were all PYMES.

Who killed them? the supermarkets. Wall Mart, Carrefour, Coto, Disco, Jumbo. Believe it or not, these chains is a totally new phenomena. It didnt exist till the 90s, and the first ten years were somehing marginal, a few shopping centers with this big supermarkets, but nothing more. Till 2000s, a good portion of our shoppings we did it in groceries stores, in small markets. In the last 10 years they killed them all. Thye grew their bussiness, the purchased more and more locations, so you have lots of Cotos in one barrio, lots of Disco. They were something marginal, not common at all.
They could change peoples habits, people todday buy at them, groceries stores dont exist anymore because they killed them. They have the monopoly, and theres pretty much no competition between them since they act (for example rising prices) together.

 

[thorsten]

So you believe super markets have a 100% net profit margin?

 

[PhilipDT]

Look, what Roberto Navarro is saying is totally true. Until the 90s in Buenos Aires we used to have minor "comerciaantes", the verdulero, that survived, the small grocery store, that couldnt make it, the carnicero, a very few survived, and a lot of other small shop keepers. They were all PYMES.

Who killed them? the supermarkets. Wall Mart, Carrefour, Coto, Disco, Jumbo. Believe it or not, these chains is a totally new phenomena. It didnt exist till the 90s, and the first ten years were somehing marginal, a few shopping centers with this big supermarkets, but nothing more. Till 2000s, a good portion of our shoppings we did it in groceries stores, in small markets. In the last 10 years they killed them all. Thye grew their bussiness, the purchased more and more locations, so you have lots of Cotos in one barrio, lots of Disco. They were something marginal, not common at all.
They could change peoples habits, people todday buy at them, groceries stores dont exist anymore because they killed them. They have the monopoly, and theres pretty much no competition between them since they act (for example rising prices) together.

The supermarkets killed the smaller business both here and everywhere else in the world for a reason. People like do most of their grocery shopping in one place, not to mention people really like to do their grocery shopping in one place if that place has better selection of higher quality products at the same or lower prices.


I've read so many odes to the verdulerias of buenos aires on baexpats. I can't wait for most of them go out of business.

 

[nikad]

I've read so many odes to the verdulerias of buenos aires on baexpats. I can't wait for most of them go out of business.

Why is that? I think the selection and quality in 90% of verdulerias and supermarkets is equally poor.