What can we do about supermarket prices?

andybk

uktim29 wrote: »

Well I've shown you that the average margin for farming is 10%. Just look at the Supermarkets financial statements, you can easily find them in Google for thier margins. You have to work that out yourself profit/gross sales * 100. Tesco is 4.97% Asda is 3.7%.

Got any actual figures anywhere Pinkshoes?

Farming does not make 10% ,

The article you published was from the state of

IOWA , USA , http://www.agmrc.org/agmrc/business/operatingbusiness/interpretingfinancialperformancemeasures.htm

also dated pre 2005 !! 3 years ago

not united kingdom or even Europe for that matter , the USA has a lot cheaper cost of production due to very little paperwork , cheaper fuel , less tax and thats before the use of genetically modified soya (the expensive protein part of the ration) and normal use of antibiotics in animal feed which lowers the cost of production by 20% and animal losses by 20% which is a 40% lower cost ,also to add ,they have a much larger scale of farms which also brings price advantage
I suggest you find euro data to back up your spurilous claims , and i strongly suspect you have more than a passing interest in the retail sector ! trying to make out the supermarkets are the good guys in all this .
This ,after it was made public about the backhanders sainsburys have been taking from potato growers this weekend !!

Pennywise

andybk wrote: »

Farming does not make 10%

Quite - many UK farms are making losses, that is a negative % figure.

Also consider the wholesalers and processors in the UK - typically making far more than either the producers or the supermarkets.

And don't forget all the retro-discounts, marketing support, BOGOFS etc., that the supermarkets make their suppliers pay for. There is a lot of clever accounting to make the supermarkets profits appear a small %, but it is well known that their suppliers have to plough back some of their profits to the supermarkets in other ways. I know, for fact, as it was a part of my job, that a particular supermarket bought sandwiches from a particular supplier at just a 5% profit, but then each month the supplier had to pay a "retro discount" of 20% of the order value back via a third company, so in effect, the supermarket's owners made 25%, but only 5% was shown as its profit in the supermarket's own accounts.

Also consider the actual pound note profit - a farmer, if he was luckly to make 10% profit on typical annual sales of say half a million would be a profit of £50,000 p.a. which is in effect his wage. A supermarket could easily have daily sales of half a million, which at say 2.5% would be £25,000 PER DAY AFTER STAFF AND MANAGEMENT WAGES. It can be very misleading to use percentages - a combination of percentages and actual amounts is needed to see the true picture, as is an understanding of how the underlying figures are arrived at.

Brooker_Dave

elljay wrote: »

I feel I am still allowing supermarkets/the government to get away with this. Like everyone else I've been paying the prices, grumbling 'what can you do?'. I left the shop feeling quite upset but now I feel angry. I'm also still angry at the organic lobbyers who insist on saying we must be prepared to pay for better quality food, my friend needs help with paying for ANY food, I'm sure organic would be great for her, but while her prunes have gone from 50p to 80p there's no chance. And petrol hasn't gone up by that much.

Is there any kind of lobby group, petition, march, hate mail campaign (!!!) - anything - what can I do?

Burn down all the supermarkets and start a revolution, the rich's heads on spikes!

red_devil

go to the small shops. Fight back and support local shops too. We need them they are the heart of the community as well.

zappomatic

uktim29 wrote: »

Well I've shown you that the average margin for farming is 10%. Just look at the Supermarkets financial statements, you can easily find them in Google for thier margins. You have to work that out yourself profit/gross sales * 100. Tesco is 4.97% Asda is 3.7%.

Got any actual figures anywhere Pinkshoes?

Waitrose 2007/2008
Gross sales: £3,950.1m (before VAT)
Operating profit: £220.7m
Margin: 5.57%

Previous year: 4.78%

For comparison John Lewis had a margin of 6.76%.

andybk

Pennywise wrote: »

Quite - many UK farms are making losses, that is a negative % figure.

Also consider the wholesalers and processors in the UK - typically making far more than either the producers or the supermarkets.

And don't forget all the retro-discounts, marketing support, BOGOFS etc., that the supermarkets make their suppliers pay for. There is a lot of clever accounting to make the supermarkets profits appear a small %, but it is well known that their suppliers have to plough back some of their profits to the supermarkets in other ways. I know, for fact, as it was a part of my job, that a particular supermarket bought sandwiches from a particular supplier at just a 5% profit, but then each month the supplier had to pay a "retro discount" of 20% of the order value back via a third company, so in effect, the supermarket's owners made 25%, but only 5% was shown as its profit in the supermarket's own accounts.

Also consider the actual pound note profit - a farmer, if he was luckly to make 10% profit on typical annual sales of say half a million would be a profit of £50,000 p.a. which is in effect his wage. A supermarket could easily have daily sales of half a million, which at say 2.5% would be £25,000 PER DAY AFTER STAFF AND MANAGEMENT WAGES. It can be very misleading to use percentages - a combination of percentages and actual amounts is needed to see the true picture, as is an understanding of how the underlying figures are arrived at.

Thank you pennywise

, that was exactly the point i was trying to get across
the trade knows it goes on , but clever accountants manage to hide the facts buried deep in third party accounts , my local abattoir is JOINT owned by tesco , but i bet the other owners make all the profit , all i know is i rear a lamb and suffer the losses and costs for 6 - 12 months and feed the mother as well , unbelievable paperwork , and legislation and the abattoir makes the same money for holding the carcase for 2 weeks , then tesco also make nearly the same markup for holding for a week .
as for the op's original comment , i believe, when you own or control such large areas of the supply chain you have a moral responsibility to look after the consumer and your suppliers , after all how many local businesses and small shops have they replaced ,
Tesco have now moved into all areas of trade , from food to insurance how long do you think they will keep prices down for the consumer when they have a monopoly (yes i know all about the trade commision but as has been shown they colude with other supermarket owners , just remember the last milk shenanigans where they fixed the price up and none found its way back down the supply chain so the public and farmers lost out ) it is a very dangerous situation to get in .
Not that the govenment cares as they just see them as big tax collection agencies , its easier to send a tax man to tescos head office with a laptop , than trail around lots of small shops examining the accounts

uktim29

andybk wrote: »

I suggest you find euro data to back up your spurilous claims

You don't seem to have any data to dispute it?

Business's can't operate at a loss, because they haven't got any money. But when I look out my window all I can see in countryside being farmed, that must be making money somehow.

I use to work with a woman until March last year whos husband was a farmer. She left because she didn't need to work, her husband was loaded.

pinkshoes

uktim29 wrote: »

I use to work with a woman until March last year whos husband was a farmer. She left because she didn't need to work, her husband was loaded.

No doubt they sold off part of their land for property development!

Farming is expensive. A combine harvester can cost £200,000, and is perhaps only needed for 150 hours a year. The you need to often employ temporary staff to do the harvesting (expensive, as they need training, and wage is high as it's infrequent work). And you probably need more than 1!

Then you need barns to store grain etc... let it dry out, do moisture tests etc...

Crop rotation? Can't use same land for same crop as it'll eat up all the nutrients. Land that's been over-farmed also needs a break and needs the nutrients putting back.

Cost of fertilisers, pest sprays etc... then loosing money on any crop that gets destroyed by pests/flooding/fire. Insurance companies don't cough up for natural disasters!

The only rich farmers that I know are the ones that sold off land for housing. The rest all work LONG hours in summer (20 hour days), and are in it for the love of the job. The money they get is shocking.

I think the farmer gets about 5p on a £1.25 loaf of bread!

uktim29

pinkshoes wrote: »

I think the farmer gets about 5p on a £1.25 loaf of bread!

I read somewhere that it was 4.8p from the sale of the average loaf of white bread (800g) costing 55p. Thats still 8.72%, more than any Supermarket margin. Above Waitrose is 4.7%. You can't operate a business with much lower margins.

As it's been mentioned several times now it's consumer demand that has caused this. All they want is as cheap as possible, and blame someone else if the Farmers aren't making money, but yet won't shop at Farm shops because it's too expensive!

moonrakerz

There's:- "lies, damned lies and statistics" !

(Ascribed to Mark Twain or Disraeli - they can't even agree on that !)