How Australian supermarket profits are presented to the masses

Been a while since written a social and investor behaviour post….

Australian supermarket retailers Coles and Woolworths reported their full year 2023 financial results.

I was aghast while watching last night’s tabloid magazine TV programs.

(I don’t know why the television was on that channel, at that time)

The ‘revolting’ headline said Coles posts $1 billion in profit.

The sub text implied “all this profit while many are struggling to make ends meet”.

Such a critical headline aimed at the financial results of a corporation does not appear on American TV. Only in Australia….

I don’t need sensitivity training nor am I sympathiser to the supermarkets. I am objectively flabbergasted by the stupidity being peddled to the masses as I’m drowning in pragmatism.

These businesses are ‘for profit’ organisations owned by shareholders.

There is a huge amount of trade that these supermarkets create. They pay large electricity bills and rent, rely on refrigeration mechanics, cleaners make the place shine, there is a hugh supply chain, truck drivers deliver those goods, they employ a combined 230,000 people whilst they inventory and perishable risk.

Many Australian visit these supermarkets for their staples yet we are the quickest to lambast them.

I have an idea…….Let’s (somehow) force the closure of these supermarket goliath’s.

What then…..are we all going to find conveniently located community co-ops providing competitive pricing with broad ranges whilst supporting the supply chains and providers (which incidentally carries on the circle of commerce) ?

Coles fiscal year revenues were A$40.5 billion and they made a net profit of A$1.04 billion. A net margin of 2.6%.

Woolworths reported fiscal year revenues of A$64.3 billion and its net profit was A$1.7 billion. A net margin of 2.6%

That’s an awful lot of product, receipts and payments to handle and process for a measly 2.6% profit margin. This is their risk to take to our convenience.

This is also why I don’t like investing in supermarket stocks. They are a terrible net margin business.

By the way, privately owned Aldi has global revenue close to an equivalent of A$190 billion.

But hey, let’s just listen to some TV reporters guiding us towards what we should be angry about.