So not only will the city be selling groceries, it will also be paying other grocery store owners not to sell groceries. This just keeps getting more insane.
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When the entire system demanded compliance... Aaron, Novak and Kyrie refused to kneel to 'Dr. Fauci.' They lost games, endorsements, and public favor—yet never lost their backbone.
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This is really stupid. Before you pass laws regulating business, you should know how businesses work.
Here's a quick primer on how the grocery business works and the absurd result this new law would have…
What happens to prices?
> Grocer’s cost for the item (what they pay the supplier): $0.75
> Normal shelf price: $1.00 equals 25% gross margin ($0.25 gross profit)
> After normal operating costs (labor, rent, utilities, spoilage, etc.), the store keeps only about $0.02 net profit (a typical 2% net margin)
What the 10% self-checkout discount does:
> Customer now pays $0.90
> Gross profit drops to only $0.15
> Operating costs stay roughly the same (~$0.23)
> Result: the sale turns into a net loss of about $0.08 instead of a $0.02 profit
Grocers either go out of business or raise prices.
Here’s what they do:
> Raise the regular shelf price to about $1.11
> Then the self-checkout price (after the mandatory 10% off) returns to $1.00
> This restores the original gross and net margin
End result for prices and shoppers:
> Shelf prices rise across the board
> Self-checkout customers pay roughly the old price
> Regular-checkout customers pay the new higher price
> Average prices go up for most consumers, and the store protects its razor-thin 1–3% net margin only by making groceries more expensive overall
What happens to cashiers?
Importantly this bill is designed to incentivize people to use the self-checkout line, thus cutting into the margins of the grocery store, thus encouraging grocery stores to eliminate the self-checkout lines and re-employ people.
Problem is grocery stores will just raise prices to offset the percentage difference.
People will still be incentivized to use the self-checkout because the grocery store will solve the problem and now you'll have cashiers and other entry-level employment go down.
The exact opposite of what this bill is intending to accomplish.
Well done!