So, Price Controls. When Will We Begin To See Shortages?

[glasgowjohn]

Citygirl , what you say makes a lot of sense but I don't think that supermarkets in Argentina are working on single figure margins.

South American supermarket chains are making gross margins well into double figures and I feel their net margins are also much higher than you would expect.

 

[Ceviche]

I was shopping in Jumbo today. Their was no shortage at all. I could find everything, I wanted! Their were no long ques. And neither I saw any empty shelves or people going berserk.

Some of you gringos, really love creating a "mountain of a molehill"..don't u?

 

[citygirl]

Um Ceviche - the controls were announced yesterday. I don't think anyone was predicting bare shelves and panic today

Glasgowjohn - I would be surprised if the SA entities were that much higher in profit margins. I'm looking at consolidated data for Walmart and Carrefour and they are about the average (1-3%) for the industry. I don't however see the Argentine market broken out specifically. But given high labor and tax costs here, I doubt they're running big profits. Now I'm curious....

ETA - Gross margins are in double figures but I'm not looking at gross, i'm looking at net. SG&A are always really high, esp in that industry.

 

[dennisr]

As The World Turns in Argentina:

http://www.lapoliticaonline.com/noticias/val/88487-6/exclusivo-como-logro-moreno-que-los-supermercadistas-congelen-los-precios.html

 

[lamarque]

Um Ceviche - the controls were announced yesterday. I don't think anyone was predicting bare shelves and panic today

Glasgowjohn - I would be surprised if the SA entities were that much higher in profit margins. I'm looking at consolidated data for Walmart and Carrefour and they are about the average (1-3%) for the industry. I don't however see the Argentine market broken out specifically. But given high labor and tax costs here, I doubt they're running big profits. Now I'm curious....

ETA - Gross margins are in double figures but I'm not looking at gross, i'm looking at net. SG&A are always really high, esp in that industry.

Citygirl i know what are the margin of supermarket very i have family in the bussines, and until 4-5 years ago the margin was around 5% and going down as the economy was becoming more stable, from that point there was a break point and the margins have been going up, now the margin are bigger to cover them self in case of unpredicteble scenarios and they profit as well of general paranoia on the people, mostly all supermarkets realize that no one already watch the prices so much so they are making more profit margin than ever an people seem to not stop buying so they keep doing it more and more. Forget about the rest of the world, the margins here are quite big and i don't think bs as is the exeption.

In any case margin of profit is normally related to interest rate in the country because the interst rate reflect in a big way the risk of doing bussines in that country, and the cost of oportunity of the money in there.

 

[Rich One]

As The World Turns in Argentina:

http://www.lapolitic...os-precios.html

Excellent speech by Moreno, Secretary of Commerce, a man of amazing People Skills a born motivator....!! Addressing the Supermarket Association

“La reputa madre que los re mil parió, ¿quién mierda le contó a Coto?”. “A ver, ya mismo me muestran los celulares todos", habría exigido el Secretario a los representantes de la ASU que lo miraron con espanto y luego terminaron firmando el acuerdo.

​

 

[citygirl]

In any case margin of profit is normally related to interest rate in the country because the interst rate reflect in a big way the risk of doing bussines in that country, and the cost of oportunity of the money in there.

Umm... not sure what net profit has to do with interest rate.

Supermarkets in Argentina may very well buck the trend of global profit margins (again, I'm discussing net only) of the industry but the SG&A costs here and taxes (esp corp income taxes) are outrageous so I would be very surprised. I'm trying to get my hands on some empirical data from Walmart and others, have a call in to a friend who does FA for the industry to see if he can break out the Walmart & Carrefour numbers for Argentina. Like I said, I'm really interested/curious now.

 

[lamarque]

Umm... not sure what net profit has to do with interest rate.

Supermarkets in Argentina may very well buck the trend of global profit margins (again, I'm discussing net only) of the industry but the SG&A costs here and taxes (esp corp income taxes) are outrageous so I would be very surprised. I'm trying to get my hands on some empirical data from Walmart and others, have a call in to a friend who does FA for the industry to see if he can break out the Walmart & Carrefour numbers for Argentina. Like I said, I'm really interested/curious now.

ok you didn't get what i was saying about interest, probably my fault for not been so clear do, dosn't matter, was just a general observation of margin expected in bussines vs risk and not related to supermarket in particular but they are affected as well. Interest rate in a country is in big part related to the riks and Bigger the risk bigger the profit a bussines expect included supermarket

 

[citygirl]

LOL - it would be nice if it worked that way but it doesn't quite frequently.

 

[French jurist]

It depends what kind of shortage we are talking about.

Fruits, meat, rice, pasta, locally produced products, washing powder (Ala, etc.), water, etc. won't be affected by shortages in my opinion.

More specific products (talking just about the French ones: Bonduelle vegetables, Maille mustard, Roquefort, Camembert Président, etc.) could indeed be affected.