Labour are deluded in attacking Supermarkets

Labour are totally ignorant if they think supermarkets are rorting massive profits. Try reading annual reports and you get a different picture.

What’s interesting about the supermarket business is that the NZ market is the most fiercely competitive in the world.

NZ supermarkets operate on profit margins of 3-5% yet in Aussie it’s more like 12-16%.

Just look at the returns posted by Foodstuffs and Progressive Enterprises parent Woolworths. Both posted profit margins of around $250-280m on turnover of 5.8-6b which is around 4.5-4.8%. 

Most major corporates post far bigger profit margins. Take Fletchers. Its margin from supplier subsidiary companies has cruised along at $130-140m per annum margin from turnover of 700-850m which is double digit.

ASB bank posted a margin over $1 billion. How about dealing to banks before supermarkets?

The lists of companies that are in double digit margins is long.

Supermarkets are certainly not in that camp. Very low margins on enormous turnover.

Labour making spurious claims about people being ripped off is nothing more than ignorant and stupid. Only a dumbo says such stupid things. We surely don’t want someone like this running out country when they can’t even deduce margins from reading annual reports.

Then when you match up their living wage proposals against supermarkets who employ a fair chunk of people in low wage brackets then you see the margins erode even further.

It is the politics of envy based on stupidity.

  • Agent BallSack

    No, Labour should attack supermarkets. After all – all their staff belong to SFWU. The more job losses in that sector, the less money into the coffers of the unions. Go ahead Labour, we dare you!

    • Bunswalla

      ABS once again you are bang on the money. I’m not sure that highlighting the stupidity of Labour policies is altogether wise – if it wasn’t for the fact that I know all they will hear is the whooshing sound as your well-made points scream over their heads.

      • Agent BallSack

        Labour don’t read Whale thank god. Or they would be ahead in the polls due to my other esteemed commentators suggestions!

  • johnbronkhorst

    I always believed, that a “fair” profit margin was….enough for the company to PROGRESS (not hold it’s ground) and a price the customer WILL pay.
    Both these things are MARKET driven!!!
    If a company is not progressing, competitors are passing them and therefore they are going backwards relative to the market.
    If the customer will NOT pay the “price”, it’s obvious that you will go bust!!!
    Interfering in either of these (by the govt.), destroys a companies profitability and therefore existence and the existence of any JOBS!!!!

  • Momo

    I am waiting for them to promise everyone a free house.

    • mike

      Not a house… an apartment in a Government designed and built structure, sort of like this. I can see a big Labour logo emblazoned on the side quite easily.

      • rockape

        I did an intelligence job in Germany for a few years and I used to zoo reports on the state of East Germany.Some of these blocks had a toilet between twenty families, water was delivered by tanker twice a week and rationed. The wonder of socialism at work!

        • Bunswalla

          You should try North Korea.

  • Whafe

    Yes indeed Labour are deluded in attacking supermarkets. It is a joke…
    As an aside though, yes the profit margins equating to some 4.5 – 4.7 %.
    But that is an overall profit margins, there are sectors within the supermaket where by profit margins are in triple figures. Again, that adds to the overall figure…
    Start asking a farmer what it is like to supply one of the 2 NZ Supermarkets!

    • jcpry

      Farmers are rich pricks though and deserve all that they get. (Or don’t get whichever the case may be)..

      • Whafe

        Lets define the comment into what sector of farmers you are talking about?

        • LabTested

          I read a comment this morning that one of the 3 contenders mention pressure on suppliers & wants that looked at as part of the supermarket review. However they don’t seem to realise that without that pressure food prices will just go up

      • cows4me

        “Farmers are rich pricks”, Sir/Madam, could you please inform my bank manager of this, this will be most welcomed news.

      • James Howlett

        I’m assuming this is satirical?

        • IWantToBeLikeMallardOneDay

          I’m guessing he’s talking from the point of view of the types of people who agree with the supermarkets argument.

  • http://manymonkeys.co.nz/ Hamilton Lad

    I think Robertson is about t announce free supermarket goods – but only for government workers. Cunliffe will promise it to everyone on the Living Wage. I’m not sure if Jones even gives a toss!

    • slade52

      Just the magazine section

    • Bunswalla

      I think we have definitive evidence that Shane Jones does in fact give a toss. Every time he’s in a hotel on tax-payer funded business, apparently.

  • Pissedoffyouth

    Be interesting in beer/wine margins – do they still loss lead?

    • Agent BallSack

      Not as much as they were but still in some sectors. As a ‘casual’ observer of such items.

      • Pissedoffyouth

        I try to by beer from the supermarket as they tend to be so much cheaper than the liqour shops. They must be razor thin when on special

        • richard.b

          It is just me, or have the beer specials at my local supermarkets not been as good for the last month?

          • LabTested

            Countdown have been knocking out a case of 2 dozen Heineken for $42 last week or so. You can always order online & get them to deliver a few months supply

          • Patrick

            Tried that but cannot get a truck and trailer down the drive and the neighbors would nick it all if it was left unattended during unloading. Am currently doing a feasibility study on a pipeline direct from the brewery to my garage. The missus thinks it is for fibre to the home

          • http://manymonkeys.co.nz/ Hamilton Lad

            I have noticed that too, I think.

        • longjohn

          Real men dont shop at the Supermarket!

          • Pissedoffyouth

            real men only eat what they kill

  • Brian of Mt Wellington

    What I disagree with is the extra charges Supermarkets charge suppliers to display their goods. Most supermarkets charge between $100-$250 a week to have products in the best places. For example a company has their product in the freezer on the end of an isle ( They call it a crowned end ) and has to pay the exorbitant charges. This cost eventually falls back onto the consumer because the supplying company will recoup this in their costs. If a company refuses to pay for a crowned end then another will jump in.

    • johnbronkhorst

      Market forces!!
      Same reason superbowl adds are so expensive…better coverage= increased sales!

    • Plue

      And for the same reason Johnbronkhorst mentions, more sales means potentially lower margins can be charged, so it might result (note the word might) in lower prices.

  • Blue Tim

    Power, food, houses, petrol, diesel, gas. Can’t wait for the perfect world when Liarbour set up state buying agencies to help us poor and oppressed survive in the cruel world. Gareth the wise one will be knighted for his wise counsel to them

    • richard.b

      Reminds me of the old movie ‘The boy in the plastic bubble’.
      Liarbour wants to put us all in one and remove the need to think.

  • blokeintakapuna

    Populist rhetoric and vote buying in the extreme, but since everyone has to eat… And just think of how much cheaper food will be once GST is removed fruit and vege’s too.

    Economic pigmy’s in a world of giants!
    If Cunliffe is so concerned about “appearances” why is it then that Labour allow themselves to be shown the omnitards of the most epic proportions?
    I only hope these vacuum-heads have to front the public with full costings on their election bribe promises!

    • Whafe

      It’s a lolly scramble, that means costings are not needed…… But when they are, oh fuck, we are in deep do do are we not Silent T

  • Michael

    These are throw away “policies” to get votes.

    • Agent BallSack

      Dreams are free after all. Hell I could promise the earth to get elected and once elected shelve it as being unaffordable. Labour voters are simply thick as pigshit if they believe anything coming out of these 3 clowns.

  • Never in the dark…..

    No mention of petrol companies?

  • IWantToBeLikeMallardOneDay

    Deal to Fonterra and Telecom if anything first.

  • AnonWgtn

    Having been to a number of Supermarkets in Australia of the same parentage as here,
    I would say they that the ones here are vastly superior, in terms of buildings themselves, food presentation and many prices.
    The staff are sloppy, not pleasant or as tidy, but that is part of the different national characters, totally opposite to my local New World.

  • GazzW

    What fucking hypocrites. Who can recall what essential services were like when controlled by government monopolies ie the socialist ideal? Six months waiting list for overpriced residential phones, an expensive shite domestic airline called NAC, foreign currency controls etc, etc, etc. Can’t wait for life under labour and a return to the good old days.

    • James Howlett

      Those proposing this sort of thing may be hypocrites, or have short memories – but a large number of the target market of the left are just too young to remember any of that and basically have no concept of the reality of life ‘back then’. The benefits of the reforms this country has been through have existed their whole lives, or at least as far back as they can remember clearly, and as far as they are concerned these things ‘just happen’. I think this is part of the key to understanding how the Greens have developed their base as well.

    • Agent BallSack

      Unless you can remember carless days you shouldnt be allowed to vote full stop.

      • Pissedoffyouth

        I agree

  • YoungA

    Liabour clearly don’t understand the difference between “gross” and “net” profit. Obviously shows when they think a “gross” number of voters are gonna vote for them when only the “net” (deluded) will

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