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I posted a bunch of evidence on Twitter for how 1) grocery stores have razor thin margins, 2) food producer margins are more average but haven't changed in two decades, 3) of course farmers aren't the ones getting rich so 4) no, the food companies are not gouging you on prices.

It's monetary inflation. Grocery stores and food producers are trying to keep up.

Most people agree due to the inherent audience selection, but the tweets kind of went viral and reached a broader political audience, so a bunch of people came in like, "How come they can put chips on sale for 50% sometimes!?!? Checkmate Alden." (it's because they don't understand fixed costs vs cost-of-goods sold) or "How do you know any of the filings are real? What if they're literally all just lying on their audited SEC filings?"

Post-truth, some of people are. The grasping for price controls is the short-time public and political instinct that ultimately makes things worse, every time.

Dakota 1y ago 💬 1

The last slide shows (I think) that Pepsi and General Mills have profit margins of 10% and 12% , respectively. Is that large or not?

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Discussion

John Christensen 1y ago 💬 1

10-12% profit margins aren’t huge, but they’re decent, especially in big companies like Pepsi and General Mills. It’s all relative to the industry, but in food and beverage I think those numbers are pretty typical. Not too big, not too small.

Dakota 1y ago 💬 1

Then isn’t that evidence against the idea that grocery stores make razor thin profit margins?

John Christensen 1y ago

Ya, I was thinking 2-4% would be considered “razor thin”. I think most successful businesses are near 15% give or take. If you are 30% you are a titan of industry. Ya, I don’t know.