snell@utzoo.uucp (snell) (11/06/89)
In article <89Nov5.163837est.18444@me.utoronto.ca>, rwh@me.utoronto.ca (Russell Herman) writes: >>The grocery business works (primarily) on a 2% profit margin. That > >I've heard this number bandied about, and frankly, I find it heard to believe. >[stuff deleted] >Does this 2% include just the retailing profit, or does it include the >vertically-integrated portions like dairying as well? 2% of gross revenues, >or assets (including farmland)? Anyone know the details of the food-processing >business and the relevant GAAP? Is this an accounting trick or another >urban legend? It is pretty close to true, and the margin may even be less than 2%. However, the 2% does not refer to the average annual return on investment. Rather, it refers to the typical mark\-up and profit margin per item sold. The secret to lots of profits is a very high turnover in the stock on the shelf. Supermarkets are not philanthropic organizations... -- Name: Richard Snell Mail: Dept. Zoology, Univ. Toronto, Toronto, Ontario, Canada M5S 1A1 UUCP: uunet!attcan!utzoo!snell BITNET: snell@zoo.utoronto.ca