Supermarkets making profits or PROFITEERING??

[DistinguishedSocialCommentator]

I posted on this forum couple of months ago on some thread that supermarkets were IMO profiteering. Yes, a business has to make profits but not this

As you know almost everything has gone up in the supermarkets, IE prices up, size and weights of items down

AIBU to feel that the supermarkets are profiteering?

https://www.dailymail.co.uk/news/article-13368851/fury-supermarkets-profits-cost-living-crisis.html

@curiositykilledthiscat do you understand how capitalism works? Shareholders buy shares. Company invests and hopefully can return shareholders monies with a little more on top.

It's very basic.

Also - these are businesses, employing tens of thousands of people. No profits no people.

This. And food is generally cheaper in Tesco than most smaller retailers

Research the difference between profit and profit margin.

Dividends come from profits.

Is that basic enough for you?

Also, how can you explain some of the salaries and bonuses the supermarkets executive team receive?

It is their job to make money. There is no other reason for their existence. Maybe buy some shares in a supermarket, and then you'll feel differently!

Yes you don’t understand economics. The supermarket sector in the uk is very competitive and only make around 3% profit or so. This competition keeps the price of essentials low for everyone.

Salaries are competitive to attract highly skilled staff to run large complex businesses. Many of our Supermarkets in the uk are listed so are owned by our pension funds.

The salaries and bonuses that the exec team get are proposed by the board and voted on at AGM. If the owners (the shareholders) think they are excessive they will vote against them.

So a large, complex, multi-billion pound business, operating in a highly competitive market, shouldn’t be allowed to attract the best executives by paying large salaries and bonuses?

These days I am spending more in the supermarket and cooking myself rather than getting take out. I suspect many others are too. That's one very valid reason why they are making more money than before.

Business in being more concerned about making profit for it's shareholders shock.

🙄

It doesn't detract from the fact that British consumers feel hard done by for a variety of reasons.
Profit is a necessity otherwise there would be redundancies on the shop floor and that's no good to anyone.

Divide the "big" number by the number of stores, the number of staff or the number of customers, and you get a very small number!!

Many of the "shareholders" are pension schemes, so it's the average man/woman in the street who benefits from getting investment returns on their pension schemes, necessary to pay inflation linked pensions upon their retirement!

How about you research the historic prices of Tesco shares? You may be surprised that they're currently worth a lot less than they were several years ago!

The large supermarkets have helped to kill the high street. They aren't known for paying suppliers generously either. Or paying high wages to staff on the shop floor. I do think they've seized the opportunity to raise prices and shrink product sizes, knowing they've already killed most of the competition and we are a captive market.
I won't be feeling too sorry for them if they are scraping by on 4% profit. Not when that 4% is millions of pounds.

I read a book years ago,name escapes me.
It was about how supermarkets treat suppliers,they are utterly ruthless Markies being one of the worst.

Hi

You are not "missing" anything

Re eggs - you'd be hard-pushed to find a box of 12 eggs as IMO a box of 6 eggs is more profitable - ie at tesoc online shopping

As I said, prices up and size/weighs down in many items

As I said in my OP, they need to make profits but this IMO is profiteering

not only the "large" supermarkets indded have killed of the highstret
If that was not enough, they started opening smaller outlets and that killed of most local shops.

I have a family member in Leeds that had a thriving business and over the years there was more and more completion - then came along a smaller, express type supermarket store - that did them in - 5 people lost their jobs and the shop still stands empty as do thousands around the uk

If you think they are making excessive profit, what profit would you consider acceptable?

They are in successful in business while other retailers are not because they sell what consumers want at a lower price. So we shop there

OP, what do you actually get out of all these threads that you post?

the supermarket industry is highly competitive. If they weren’t selling what we wanted at a good price they wouldn’t be making a profit. Their profits are small as a percentage of turnover and they are highly efficient businesses.

It isn't profiteering because what they've done is retain their % margin. However, because the actual prices are higher, the relative margin in terms of £ has also increased massively. The supermarkets have pushed suppliers into absorbing majority of production increases too.

I think its wrong that supermarkets haven't been expected to make concessions though.

"They are in successful in business while other retailers are not because they sell what consumers want at a lower price. So we shop there"

It's not a level playing field though - they can bulk buy (and therefore purchase at a lower price), in a way that a smaller retailer cannot. And a large supermarket can afford to run a new branch at a loss, until it's captured the local market (by driving smaller retailers out of business). This can't happen in smaller, businesses.