Is too much choice an issue and how do you decide what to buy?
Posted by: looklively
22nd Mar 2017 11:05am
KennethS
- 23rd Mar 2017 02:55pm
Sorry to disappoint you but the blackmailers in the supermarket business are Coles and Woolworths, who use their dominant market position to squeeze extra discounts from suppliers, in fact Coles has suffered several multi million dollar fines in the past couple of years for unethical and illegal business practices in relation to their suppliers.
The profitability of a retailing operation is determined by stock turn, and in the supermarket business stock turn is very high, very few items have a stock turn of less than 20 many have one of over 50 (especially the lost leaders of bread and milk, which are used as drawcards to entice customers to shop.
On the whole a majority of stocked items have margins close to, and in many cases over 100% - just think about their specials discounts, and apart from Bread and Milk they don't as a rule run lost leaders, although they are far from backward in approaching suppliers to extort additional discounts for marketing specials - the successful prosecutions were based on this practice, where they threatened suppliers to drop their lines unless they cut the supply price.
So think about a stockturn of 20 on the employed capital. Nice work if you can get it.
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