Supermarket Perimeter - June 2024 - 3

Editor's note
Editorial
JOHN UNREIN
Editor
ANDY NELSON
Managing Editor
HAYLEY HYER
Digital Media Associate Editor
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TROY ASHBY
Publisher
GRETCHEN WAGNER
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LAUREN JULIANA
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and Promotions
WHITNEY HARTMAN
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DUSTIN PICKMAN
Audience Development Director
CARLEA CHANCE
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JON HALL
Director of Digital Media
CARRIE FLUEGGE
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NORA WAGES
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ANNIE FOURNIER
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ELISABETH SPILLMAN
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MARJ POTTS
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BECKY WHITE
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FIONA DANKER
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JIM WHITE
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ABBY CHRONISTER
Promotions Media Designer
Corporate
CHARLES S. SOSLAND
Chairman and CEO
L. JOSHUA SOSLAND
President
STACI GRECO
Chief Financial and
Administrative Officer
MEYER SOSLAND
Chief Operating Officer
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JUNE 2024 - 3
ANDY NELSON
anelson@sosland.com
Price
perception
and
reality
The gap between perception and reality when it
comes to the cost of things and how much
companies make is a topic I'm guessing we've all had
experience with.
When I started working for daily print newspapers
(remember newsprint?) in the 1990s, I assumed
that the salaries for reporters bore at least some
vague resemblance to the financial situation of the
newspaper owners.
Imagine my shock when I found out that it wasn't uncommon for newspapers, even in
that fairly recent era, to enjoy 25% or higher profit margins.
Grocery stores have the exact opposite perception problem.
According to recent research by the Retail Feedback Group, shoppers believe their
grocery store has a net profit of 31%.
Close. Just drop the 3 and you've nailed it.
According to FMI - The Food Industry Association, grocery profit margins have
historically been closer to 1%.
Profit margins aren't everything, obviously. The owner of the newspaper I worked for
didn't live in a castle, and the owner of my hometown grocery store didn't live in a hut.
But the perception gap on profit margins is a big deal in inflationary times like the ones
were living in now.
When the Retail Feedback Group, in that same study, asked consumers about whether
their supermarket was " on their side " when it comes to inflation, and if their store was
good at communicating why product prices have risen in the past few years, the answer
to both was a resounding " no. "
I don't know how retailers would go about educating their consumers about profit
margins. But what they can do - and what the thriving ones are doing - is find new
ways of letting shoppers know they're feeling their pain and come up with budgetfriendlier
ways to meet their food needs.

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Supermarket Perimeter - June 2024

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