Comment on Chocolate kept in anti-theft boxes as retailers warn it's being stolen to order
FishFace@piefed.social 16 hours agoChocolate has experienced extremely high inflation lately because climate change is causing crop failures in countries where chocolate is grown. So no, it hasn’t yielded a better-quality product - it has just been necessary to have chocolate on the shelves at all.
That puts a floor on the price that retailers can sell the product for and have it make sense. If carrying the product at that price results in losses due to theft, there’s no point selling it for less, because that will incur greater losses. They might try anti-theft measures, or increasing the price to balance the losses - neither of which benefit people in general. If none of that works, they’ll just not sell the product at all.
tetris11@feddit.uk 16 hours ago
Shouldn’t the retailer soak up some of those costs if their suppliers are unable to deliver? In a rational economy where there would be more competition, surely they would take that financial hit to retain their shoppers whilst offsetting the cost on another product.
They don’t seem to be doing that. None of them seem to be doing that, and I’m just not buying that the reason is solely because of climate change
FishFace@piefed.social 16 hours ago
I think supermarkets’ low profit margins are reflective of a fairly competitive sector. Do you think Sainsbury’s, Tesco, Lidl, Asda and the rest all colluded to increase prices on chocolate products… at a time when, coincidentally, the price of cocoa quadrupled? I don’t think there’s any evidence of that, and the price increase is adequately explained by other factors.
It’s worth saying that the commodity price has now come back down (I only just realised this). So prices should be coming back down as well. But prices are always quite sticky, especially on the way down. There are quite easily explained reasons for that which we can go into if you want.
But to answer your question, “Shouldn’t the retailer soak up some of those costs” the rational thing to do is to absorb costs for as long as that is the most profitable thing to do. But if commodity prices literally go up 4X, the only way you can absorb the cost is to be making a large loss on every bar of chocolate sold. Why would you do that, instead of either a) charging more or b) using the shelf space and distribution costs for something else?
You can lay out a scenario where it’s rational for the retailer to keep stocking a loss-making product - to get people in the door and to buy other things which net a greater profit than is lost on the chocolate or whatever. But that’s just a scenario, and clearly it’s only a question of tweaking some values to come up with a scenario where that loss-leader strategy makes no economic sense. Clearly the supermarkets didn’t believe it made economic sense.