.
View attachment 10078
.
Of course, they are....they're telling customers "If you want to get raped by unnecessarily high prices....take your pocketbook somewhere else."
.
A sharp competitor would have all their ads lead with Pepsi products to steal away shoppers. Most people who want those products will just shift all their shopping to where they can get most or all of their groceries. That business is a low-margin endeavor that requires high volumes. The business you drive to your competition helps them at the same time it hurts you. This is similar to the Bud Light thing. I would point out that most business don't make a profit on the first ~85% of capacity (revenue), they need that level to cover labor and fixed overhead & legacy costs, -the kinds of costs that go on even when the doors are closed,. Below ~66% they go bankrupt almost overnight. All these waypoints illustrate that the last ~15% is where all the profit is. That’s where all the operating expenses are paid for by that first 85% and your only expenses are for the products you buy to sell so all the margin goes straight into your pocket. A single % gain in that portion of sales, say from 95% to 96% looms huge in profit. Remember, you don’t clear a dime below ~85%. The % of capacity varies from industry to industry as do the margins % (profits). They are real close between competitors within a given industry. Losing a grocery customer means losing one family shopper 52 to 60 trips a year. That’s a big deal if you add a multiplier like snack foods which have a higher margin. You are driving away a premium customer. Dumb, in spades.
The grocery chain,
Carrefour is between a rock and a hard place responding to a French government demand to control prices by Jan. 31st. These are the same ilk driving Dutch farmers, -THE most efficient farmers in the world, out of farming and returning their land to ~nature~. Remember what happened in 2022 in Sri Lanka in the first, one, single year following the banning of chemical fertilizers? Mass family farm output shortfalls causing
food shortages and starvation. The politically correct government thought they could kill two birds with one stone, reduce dependence upon foreign oil, and foreign exchange outflows by cutting off chemical imports, but didn't understand the yang that corresponded to the yin. The green revolution we enjoy is chemical in nature, and based upon fossil fuels and mining. Also, municipal sewage & water systems can't exist without chlorine. Switching to “natural” fertilizers in Sri Lanka and the EU sounds greenie weenie utopian, but in reality is closer to Antoinette Macron declaring, “Fritos? Non. Let them eat shit”. Do they still have the guillotine in France?