[michaelt]

The grocery industry generally has pretty low margins. Wal-Mart's profit margin is 2.39%.

If you go into a grocery shop to grab lunch, spending $8 on 4 items, and they make 5 cents of profit per item? They need to run an extremely lean operation.

Or target price-insensitive customers, I suppose.

[fsckboy]

>They need to run an extremely lean operation.

they simply need to run a good ordering/inventory system. If they sell every item (on average) in each store every week, that's 2.39% return on the value of the inventory investment each week, or 52*.0239 or over 100% annual return on money they borrow for free because the store pays its grocery bills to suppliers in arrears, net 10 days, etc

[michaelt]

What I mean is: If you're making 5 cents of profit per item, and your workers cost $10/hour then the difference between a profit and a loss is 18 employee seconds per item.

Which is not much.