What can we do about supermarket prices?

andybk

Blacksheep1979 wrote: »

Yes because all farmers everywhere all have brand spanking new top end cars.

most livestock farmers i know drive older cars , the ones driving new cars mostly are arable farmers ,and many of these have estates and assets worth many millions , you wouldn't bat an eyelid if your local successful builder had a new car , so why cant they ? but don't put all farmers in that category , food is a necessity and you and everyone else depend on it more than anything else !
There were lots of subsidies to enable farmers to produce food at below the cost of production in the 70s and 80s ,and this brought the price of wheat down to £60 per tonne and milk to 15 pence per litre (it costs 26p to produce ) , unfortunatly these cheap prices wernt passed on by tesco and co , they kept the extra , how do you think they afford to buy all the land and build big stores ,
but the public wanted rid of these subsides , and now are nearly all gone , so now there are no surpluses,and we are all open to the volitility of the world markets , which can and will be harsh , especiall as china are now buying eveything , and much land is turned over to bio fuel
price rises have only just begun with food ,and there will be 30 years inflation to come , you may laugh now but you may be looking at £3.00 and more a loaf in 5 years time .;)
CHEAP FOOD IS|OVER !!!

uktim29

I'm not quiet sure what the point of this thread is.

The first fact is supermarket retail has a profit margin on average of 5%. There are very few if any industries that have a lower profit margin. You can see this for yourself by reading any financial section of a newspaper or by reading their profit statements on their websites.

Profit margin is the most important aspect of any business, it gives an in site into how much money it has to spend or change any of it's operations. That lower the margin, the less maneuverability it has for buying more expensive stock, paying higher rent, paying higher wages etc.

5% is very low. I know that lots of 5%'s can add up like if you look at Tescos figures but that is only due to the massive size of the company. It's margin has no room for lowering prices or paying more for wholesale stock. If the cost of running their business goes up by 6% then they make no money, see, thats why a low profit margin makes very little maneuverability for changing their business.

People complain about supermarket prices, then complain that farmers don't get paid enough for their stock. Well the answer then for them to earn more money is the prices for food needs to go up. So what do you want? Cheap food or Farmers to earn more money?

Farm shops/Butchers etc on average are not cheaper than supermarkets. Some myth that seems to have developed. I know, I use them all the time. Yes I know about 1% of things you find might be cheaper, thats to try and get trade, everything else is more expensive.

The problem really now still is the consumer. If a price goes up by 10p then people complain, they want everything for nothing, or as little as they can possibly get. This forces the business model of supermarkets to try and achieve this, and causes the above.

It is not supermarkets to blame. It's you!

pinkshoes

uktim29 wrote: »

I'm not quiet sure what the point of this thread is.

Timtims, I'm sure some would say that they can't see the point of a lot of your posts!!

The point is, that there are several stages in a product; firstly the farmer that grows/rears the product, secondly the company that makes the packaging for the product, thirdly the company who brands it, and finally the supermarket.

And I'll let you guess which one puts the biggest mark up and makes the biggest profit??

uktim29

pinkshoes wrote: »

Timtims, I'm sure some would say that they can't see the point of a lot of your posts!!

The point is, that there are several stages in a product; firstly the farmer that grows/rears the product, secondly the company that makes the packaging for the product, thirdly the company who brands it, and finally the supermarket.

And I'll let you guess which one puts the biggest mark up and makes the biggest profit??

You've obviously guessed because you don't actually know.

I think you'll find theres a higher mark up than 5% in farming. There's not much to read, this link is a few years old but talks about an average over 10 years http://www.agmrc.org/agmrc/business/operatingbusiness/interpretingfinancialperformancemeasures.htm

"Operating profit margin ratios have averaged about 10 percent in the last decade"

I don't know why some people can't see the point of my post, it goes straight to the cause of supermarket prices/prices achieved for Farmers wholesale stock.

I know some people won't like it, because it's not in their mentality to blame themselves it has to be someone elses fault. Even better if they think some other like minded people will join in (not really knowing anything about what thier talking about) so they can feel like their right because they can then back each other up. It's just herd mentality.

andybk

uktim29 wrote: »

I'm not quiet sure what the point of this thread is.

The first fact is supermarket retail has a profit margin on average of 5%. There are very few if any industries that have a lower profit margin. You can see this for yourself by reading any financial section of a newspaper or by reading their profit statements on their websites.

Profit margin is the most important aspect of any business, it gives an in site into how much money it has to spend or change any of it's operations. That lower the margin, the less maneuverability it has for buying more expensive stock, paying higher rent, paying higher wages etc.

5% is very low. I know that lots of 5%'s can add up like if you look at Tescos figures but that is only due to the massive size of the company. It's margin has no room for lowering prices or paying more for wholesale stock. If the cost of running their business goes up by 6% then they make no money, see, thats why a low profit margin makes very little maneuverability for changing their business.

People complain about supermarket prices, then complain that farmers don't get paid enough for their stock. Well the answer then for them to earn more money is the prices for food needs to go up. So what do you want? Cheap food or Farmers to earn more money?

Farm shops/Butchers etc on average are not cheaper than supermarkets. Some myth that seems to have developed. I know, I use them all the time. Yes I know about 1% of things you find might be cheaper, thats to try and get trade, everything else is more expensive.

The problem really now still is the consumer. If a price goes up by 10p then people complain, they want everything for nothing, or as little as they can possibly get. This forces the business model of supermarkets to try and achieve this, and causes the above.

It is not supermarkets to blame. It's you!

I see you have been sucked in to the 5% argument , well what you dont know is supermarkets also own large chunks of the supply chain , ie the abbatoirs etc in the case of meat production , and they take a damn site more than 5% , thats how they get their figures the overall profit is split between many levels of bussiness and will be probally nearer 30% or more .
was once told by a spanish fruit grower that he aways had 6 or 7 uk buyers each year to buy his fruit , now they all club together and there is only 1 buyer and a damn great ship , he was told take the price your offered or thats it , and you get nothing , it may be good for short term prices but do you think thats good for the future of fruit supply , i dont think so , and the supermarkets exert that sort of pressure on all their suppliers .
Milk will be rising due to the poor prices paid over many years , and the numbers that have left the industry , (massive amounts of small family farms ) supermarkets have also driven out any competition to themselves by legislation promoted by political lobbying , to mps who have no clue as to what is going on
Its just like the backdoor politics that went on during the slave trade !

uktim29

andybk wrote: »

thats how they get their figures the overall profit is split between many levels of bussiness and will be probally nearer 30% or more

But it's not. When you go through their financial statements these include everything they own. I was not talking about margin at store level.

Still though, what is it thats driving them to sell stock as cheap as possible? See my earlier post!

andybk

well im on the ground , and i know what we get , then i go to the store and i know what they get , and i know the costs involved , and most of what we sell to them is double or treble the cost , (200% - 300%)
you can make whatever figures you like with good accountants , and they have the best !

elljay

Articles like this are what make me so cynical.

Liz

http://www.theecologist.org/archive_detail.asp?content_id=308

uktim29

andybk wrote: »

well im on the ground , and i know what we get , then i go to the store and i know what they get , and i know the costs involved , and most of what we sell to them is double or treble the cost , (200% - 300%)
you can make whatever figures you like with good accountants , and they have the best !

Well believe me there is no 200/300% margin in supermarket retail. Operating costs/Wholesale prices are not figures that can be fiddled by an accountant. At the end of the day this still doesn't get away from the fact that cheap food prices, therefore the amount Farmers will earn are driven by consumer demand.

It's the consumers fault, not the supermarkets. Just look at the title of this thread, they're at it again!

uktim29

elljay wrote: »

Articles like this are what make me so cynical.
http://www.theecologist.org/archive_detail.asp?content_id=308

Of course their going to want a good wholesale price. As I said above, 6% more and they'll run at a loss, then they'll go out of business.

But whos fault is it that they ae trying to sell food so cheap, look at the title of this thread!