Monday, April 24, 2006

 

Supermarket Pricing

All I hear on the radio and TV is that the supermarkets in
the United States work on the lowest margin of profit that
there is.....Some 3 to 4%......That lead me to try to figure
something out.....

The regular price on an item is $1.39......There is a sale on that
item and it is reduced to $1.00.....Reduction in price of 39 cents...
This is a reduction in price of almost 30%.....

Now consider that the item on sale is known as a "loss
leader".....An item which will get you into the store so that you
can spend other money......But still, I suspect that if anything,
the "loss leader" is being sold at cost.....And therefore it was
sold the previous week at 30% profit......

Even after all the profit items and non-profit items, a supermarket
executive wants to tell me that they are only making only 3 to 4%
profit......It must be after they take out store operation costs.....
I guess when you are making millions, 3 to 4% net profit is really
not that bad.......Pumps
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