Supermarket Blackout Movement /tomorrow Friday

[GuilleGee]

I also don't get it. What is the point of boycotting the supermarkets?

The idea is to get the point across that they cant charge markups of over 50 to 100 %. Of course this wont work, but at least it shows that some civil discontent is taking shape. Now we will have to see who it gets aimed at...

Although it is easily discernible that inflation is caused by an increase in the money supply and years of misguided policies, it is also important to note that many retailers get away with charging ridiculous profit margins here. In the US, in the grocery business, you are very lucky to make 5 - 10% markup. Here the norm is to markup at least 50 %, and many cases the double. This to me is one of the main problems with the Argentina economy - retailers and business people are always focused on buying for X and selling for 2X. Now I know that this is not always the case, and I am sure David Glen will have some input on Profit Margins (see his detailed post on the cost of doing business in retail here), it more often than not is.

I would bet that markups at Carrefour & Coto among other big name grocers is above 50% - so this is the point of the consumption blackout.

-- I am editing this post since I erred in my original post writing profit margin when I meant markup. Apologize for the confusion & lack of clarity, at work and not very focused!

 

[Rich One]

The idea is to get the point across that they cant charge margins of over 50 to 100 %. Of course this wont work, but at least it shows that some civil discontent is taking shape. Now we will have to see who it gets aimed at...

Although it is easily discernible that inflation is caused by an increase in the money supply and years of misguided policies, it is also important to note that many retailers get away with charging ridiculous profit margins here. In the US, in the grocery business, you are very lucky to make 5 - 10% profit margin. Here the norm is to make at least 50 %, and many cases the double. This to me is one of the main problems with the Argentina economy - retailers and business people are always focused on buying for X and selling for 2X. Now I know that this is not always the case, and I am sure David Glen will have some input on Profit Margins (see his detailed post on the cost of doing business in retail here), it more often than not is.

I would bet that profit margins at Carrefour & Coto among other big name grocers is above 50% - so this is the point of the consumption blackout.

Question? If a supermarket sells a product for 100 pesos that was purchased for 50 pesos what is the net profit after taxes? In your opinion? Consider all overheads, payroll, advertising and all taxes etc. etc. More or less than 10% ??
Educate us!give us a figure!Perhaps Gross profit margins may be 50% But Net?

 

[sleazemerchant]

The idea is to get the point across that they cant charge margins of over 50 to 100 %. Of course this wont work, but at least it shows that some civil discontent is taking shape. Now we will have to see who it gets aimed at...

Although it is easily discernible that inflation is caused by an increase in the money supply and years of misguided policies, it is also important to note that many retailers get away with charging ridiculous profit margins here. In the US, in the grocery business, you are very lucky to make 5 - 10% profit margin. Here the norm is to make at least 50 %, and many cases the double. This to me is one of the main problems with the Argentina economy - retailers and business people are always focused on buying for X and selling for 2X. Now I know that this is not always the case, and I am sure David Glen will have some input on Profit Margins (see his detailed post on the cost of doing business in retail here), it more often than not is.

I would bet that profit margins at Carrefour & Coto among other big name grocers is above 50% - so this is the point of the consumption blackout.

In the USA, the typical profit margin for a supermarket is only 1%. There is no chance any supermarket here is operating on a 50% profit margin. I think you are confusing markup with profit. Keep in mind that all the big supermarkets have to operate completely in white which is extremely expensive and comes with many ancillary costs that you are not taking into consideration.

 

[French jurist]

One question I have about supermarkets here (if anyone knows).

What do they do with the unsold food products?

I know that in France they:
- Throw it to the garbage (hence, with the crisis, people who pick up food in the garbage... Then the supermarkets began pouring Clorox on the food once thrown away, etc.)
- Have a deal with an ONG who will take the food & redistribute it to the sub-proletariat.

It's likely more or less the same in other Western countries.

But I've never seen/read anything about that here.

 

[scotttswan]

One question I have about supermarkets here (if anyone knows).

What do they do with the unsold food products?

I know that in France they:
- Throw it to the garbage (hence, with the crisis, people who pick up food in the garbage... Then the supermarkets began pouring Clorox on the food once thrown away, etc.)
- Have a deal with an ONG who will take the food & redistribute it to the sub-proletariat.

It's likely more or less the same in other Western countries.

But I've never seen/read anything about that here.

The uk discounts all the food before its expiry date and then throws it out when it passes it.

As a student heading to the local supermarket just before it closed resulted in a freezer full of random food that was dirt cheap!

 

[GuilleGee]

I apologize, I did intend to write Markup and not Profit. As someone who has worked in retail for almost 10 years, I know for a fact that markup in the US tends to not go over 10%. Profit Margin before taxes is from 3 - 5$ and after taxes less than 1%

I am going to edit my original post with a note advising of this error.

Question? If a supermarket sells a product for 100 pesos that was purchased for 50 pesos what is the net profit after taxes? In your opinion? Consider all overheads, payroll, advertising and all taxes etc. etc. More or less than 10% ??
Educate us!give us a figure!Perhaps Gross profit margins may be 50% But Net?

Buys product for $50 pesos + 21% IVA = $60.50
Sells Product for $100 pesos + 21% IVA = $121.00
IVA payment to govt is $21.00 - 10.50 = $10.50

So, Gross Revenue from this sale is $50 (121.00-10.50-60.50)

I agree that from this $50 we need to subtract Personell costs, Ingresos Brutos, etc. However this still leaves a remaining profit margen for the business of much more than 10%.

 

[Rich One]

I apologize, I did intend to write Markup and not Profit. As someone who has worked in retail for almost 10 years, I know for a fact that markup in the US tends to not go over 10%. Profit Margin before taxes is from 3 - 5$ and after taxes less than 1%

I am going to edit my original post with a note advising of this error.



Buys product for $50 pesos + 21% IVA = $60.50
Sells Product for $100 pesos + 21% IVA = $121.00
IVA payment to govt is $21.00 - 10.50 = $10.50

So, Gross Revenue from this sale is $50 (121.00-10.50-60.50)

I agree that from this $50 we need to subtract Personell costs, Ingresos Brutos, etc. However this still leaves a remaining profit margen for the business of much more than 10%.

I always ask this question! and the answer always irritates me in extremis...! Profit margin is a LOT More than 10 % ... What 11 %

 

[Joe]

You hear this all the time about outrageous profit margins You would think people would start their own business and become millionaires.

 

[mrporoto]

makes one wonder how folks survive in these parts!! funny how the eaterias are generally busy.

 

[GS_Dirtboy]

One thing that the gov'ment says that I agree with is that inflation can be a self-fulfilling prophecy.