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The Feedback Group is out with a new survey of grocery shoppers in which they were asked "from the money spent at their primary store, how much they think is left for profit, after the store pays all expenses and taxes. On average, shoppers indicated they believe their primary store has a net profit of 33%."

FMI-The Food Industry Association says that the actual number is close to one percent, though it did get as high as three percent in 2020.

“Clearly, grocery shoppers believe that the stores they shop are far more profitable than they actually are,” says Doug Madenberg, Chief Listening Officer with The Feedback Group. “This inflated view of profits certainly leads some shoppers to think that food stores simply aren’t doing enough to keep prices down.”

The study also concluded:

"Shoppers employ a wide range of strategies to cope, foremost being purchasing more food and groceries at stores with lower prices (46% have used this strategy), eating more often at home instead of restaurants (also 46%), and buying more items on sale (43%). Other common strategies include buying more store brands instead of national brands (38%), purchasing more bulk-pack items to lower the price per serving/unit (25%), buying fewer last-minute or impulse items (25%), substituting similar, less expensive foods (24%), and using a store’s weekly sales flyer to plan their shopping list (23%). Additionally, some shoppers compare prices at multiple stores before buying an item (18%), purchase food for home that is less healthful but also less expensive (15%) and buy fewer organic items and products to cut costs (12%)."

KC's View:

That 33 percent profit number is staggering … and retailers have only themselves to blame.

If they did a good job of telling their own stories - even laying out for shoppers and employees, to some degree, their financials - then people would be disabused of the notion that supermarkets are raking in the cash at shoppers' expense.

While the number may be staggering, it isn't surprising.  Over the many decades that I've been writing about the industry, I've often had this conversation with people who are surprised about food retailers' net margins.  I cannot image retailers are surprised.

One question, though.  Profit number are calculated after taking out all expenses.  That includes salaries … which I suppose would include the executive compensation numbers cited in our Eye-Opener, above.  Which might be a reason that the industry has not done a better job of telling its story…?