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0 pointsscoofy26d ago0 comments

I don’t think you understand what I mean when I say “low margin.” The types of products you are describing are the extremely low margin products.

People pay more for the 16 flavors of Colgate because they want to pay more for Colgate… that higher price means more margin for the retailer. By eliminating the higher margin products in an already low margin business, you are basically making the situation even worse.

The only reason why generic brands at stores can end up being high margin for the retailer is because the retailer has literally used their market position to start manufacturing cheaper versions of high margin products on their shelves. Unless NYC want to start manufacturing dryer sheets and toothpaste, that’s not an option for them.

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ceejayoz26d ago

> the retailer has literally used their market position to start manufacturing cheaper versions of high margin products on their shelves

And we don't think a city of 8M people can use their market position to do such a thing?

scoofyOP26d ago

No! That’s ridiculous. New York City is full of businesses (services) that can barely survive and constantly need to get bailed out by the state.

The idea that somehow NYC is going to start operating a for-profit toothpaste company to prop up a grocery store is genuinely absurd. There likely isn't even enough people in NYC to justify the costs of production! We're talking about national and international retailers engaged in these practices... selling to hundreds of millions of customers.

These are very risky endeavors that have bankrupted multiple grocery chains. NYC should not be operating something with that risk profile to simple get cheap consumer packaged goods on the shelves... especially when the business is already extremely competitive and low margin!

ceejayoz26d ago

> The idea that somehow NYC is going to start operating a for-profit toothpaste company to prop up a grocery store is genuinely absurd.

That is not at all how store brands work.

scoofyOP26d ago

It's still a company and a brand, even if it's a private label or white label products. It's still an investment with the potential to lose a ton of money. It's still a business. I still think the idea that NYC's grocery stores are somehow going to out compete stores with much larger volume is just a ludicrous prospect. Especially when they're going to pay their employee's more.

But, maybe it works and I'm missing something. I mean, is it a worthwhile experiment? Sure, but I hope there is a cap on how much money they're allowed to lose before the program is shuttered.

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ceejayoz26d ago

> the retailer has literally used their market position to start manufacturing cheaper versions of high margin products on their shelves

And we don't think a city of 8M people can use their market position to do such a thing?

scoofyOP26d ago

No! That’s ridiculous. New York City is full of businesses (services) that can barely survive and constantly need to get bailed out by the state.

ceejayoz26d ago

> The idea that somehow NYC is going to start operating a for-profit toothpaste company to prop up a grocery store is genuinely absurd.

That is not at all how store brands work.

scoofyOP26d ago

But, maybe it works and I'm missing something. I mean, is it a worthwhile experiment? Sure, but I hope there is a cap on how much money they're allowed to lose before the program is shuttered.

j / k navigate · click thread line to collapse