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by ceejayoz 225 days ago
I mean, this line hints at at least one alternative they've in fact done a little in the past.

> Kroger said it would repurchase $7.5 billion of its shares after a more than two-year pause, with $5 billion of that to be repurchased in an accelerated fashion — the same sum that Kroger estimated Wednesday it has spent to lowering prices over the past 21 years.
1 comments
lotsofpulp 224 days ago
That alternative is so that they can compete with Walmart and Costco and Aldi and Winco and survive.

How anyone can complain about a 2% profit margin, especially on a forum where workers earn high salaries because they work for businesses with 20%+ profit margins, is beyond me. Expecting every organization to be a charity seems a bit immature.

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ceejayoz 224 days ago
> How anyone can complain about a 2% profit margin, especially on a forum where workers earn high salaries because they work for businesses with 20%+ profit margins, is beyond me.

I'd very much rather be in the business of selling $100B at 2% profit margin than selling $100k at 50% profit margin. Same for health insurers - they have enormous volume. Low-margin isn't a great defense, especially as it's a gameable metric; you can reduce margins in all sorts of ways.

Like, say, spending some on private jets. https://nbaa.org/membership/member-profiles/the-kroger-co/

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lotsofpulp 224 days ago
> I'd very much rather be in the business of selling $100B at 2% profit margin than selling $100k at 50% profit margin.

How is this relevant? A business’s goal is to earn a return for shareholders. A business also needs sufficient profit margin to weather volatility.

It is quite evident that with current technology, the business of retailing groceries, and retail in general needs about a 2% profit margin to survive long term, and earn a sufficient return to be worth investing in. Same for insurance.

Obviously, this is an objectively low amount of profit margin, given that 0% is a charity. So again, how can one complain about a business earning too much money when there exists no competitor that can deliver these goods at a lower profit margin?

The argument is in the same vein of there is no labor shortage, just a shortage of buyers able and willing to pay enough.

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