Quote:
Originally Posted by Sly
Okay, so then maybe the standard grocery store is charging more for pizza because they know people will pay it!
Don't really know... I've heard grocery stores only make a penny per dollar spent. Don't know anything besides that.
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That is true. Industry standard net profit margins for grocery stores are 1c on the dollar.
They taught me that when I was bagging groceries when I was 15 years old (if you double bag you're giving our only penny of profit away) and I also heard an analyst say something about it on CNBC last year. (That's net after ALL expenses though...don't confuse that with the gross margin or mark-up from cost on the goods they sell, those numbers are WAY different)
I'm just wondering if Wal-Mart has cut into the older chains' market share so badly that they need a ridiculous mark up to cover their leases etc on the volume they have left....or if the other chains are just gouging the people for whom time is too valuable to shop at Wal-Mart.
I also wonder if these chains have the same type of pricing in areas where there is no Wal-Mart grocery. i.e. if they're competing with other stores where they can have the lowest price in town, maybe they do take lower margins to try to increase volume in those specific markets.