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by treeman79
1178 days ago
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Free market economics means that if absurd profits are being had, then new people coming to the game will offer slightly cheaper prices. A price were willing occur until surviving companies are making minimal amount of profits. Related is if someone figures out how to produce the same amount for less effort/cost. If someone is making absurd profits for long periods, then usually some major factor such as government regulations is preventing new players from entering the market. |
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Supermarkets are expensive but still not expensive enough for someone to bootstrap an operation to elbow themselves into the market as a new player and expect to still make profit.
> A price were willing occur until surviving companies are making minimal amount of profits.
> Related is if someone figures out how to produce the same amount for less effort/cost.
Existing supermarket chains have massive delivery networks and associated efficiency, already have
- the real estate and - all the internals of a retail store and - the associated warehousing set up, - all the personnel who know their way around the store and where everything goes (which is a huge part of the efficiency of distributing the wares in the store), - "brand" recognition of the store (Aldi, Tesco, Walmart, ...)
which means the new competitors would very likely have to massively loss-lead at a time when the already-established market participants are making more profit than before.
> If someone is making absurd profits for long periods, then usually some major factor such as government regulations is preventing new players from entering the market.
Selling foodstuffs especially is an area of business where a huge chunk of regulations are absolutely justified and it's not like all of the food singled out because of expired shelf life ("MHD"/"Mindesthaltbarkeitsdatum") is getting thrown into the garbage (at least here in Germany). I currently work in a supermarket and have done so in a different chain before this one and from what I know most damaged or "expired" food is getting written off and then either set aside in the appropriate temperature store-room for the "Tafel" (food bank) OR if it's really unfit/unsafe for consumption (moldy, completely interrupted cold chain [1] or obvious signs of spoilage like bloated food packaging) it gets thrown into the garbage.
Raving about "free markets" from ones ivory tower is all well and good but the reality is that because of corporate consolidations and necessity-for-living many economic sectors are effectively locked down by (implicit) cartels, either because it's cost-prohibitive to even enter - let alone succeed in - that market or because the actual necessary infrastructure has been divied up between the current market participants (think USA and their local mono-/duopolies of ISPs).
[1]: For example when we find items which should be kept cool or frozen in other areas of the market having been taken and left there by customers who obviously don't care (like that one time I found fresh fish with its plastic bag bloated to bursting in a warm section of the market during summer time, thankfully the packaging wasn't damaged or it wouldn't have been pretty).