Everything in the world makes more sense when you accept that it’s all supply and demand. The net worth of the family that owns the business is irrelevant.

Supply and demand can both be impacted by perception, which can be tweaked by humans.

If tariffs increase the wholesale cost of an item by $1, but you can make consumers think $5 retail is what the increase should be, that’s an extra $4 in your pocket.

Economics education doesn’t stop at 101 for a good reason. “Supply and demand” is like “veins carry deoxygenated blood” - it’s largely true, but further learning reveals complexity.

Yes. If people are unwilling to pay $5 more, they will buy less or buy none. That decreases profits due to decreased demand. Now there is more supply than demand, which means you need to make the purchase more attractive, which generally means spend more on advertisements/rebates, lowering the price to an acceptable rate or improve the product value. Or strike a balance where you shrink both the cost (size), and price, and advertise the cheaper price to make people think they are getting a better deal when they are really just buying less for the same price (or more). Round and round it goes; supply, demand, and misleading.

People should remember that it isn’t just the corporations who raise the price that are at fault, it is the people who are unwilling to go without it when the price is overinflated. Yes, then we nit-pick into things like medical necessity and … thus back to the point that it is both supply and demand, and not.

> Supply and demand can both be impacted by perception, which can be tweaked by humans.

Supply and demand is impacted by many factors, but it’s still supply and demand.

You can put different labels on different components of the influences, but at the end of the day it’s still supply and demand.

It's not a pity. It's a valuable tool to understand behavior as it relates to supply and demand.

Supply and demand isn't the only thing that exists, but basically everything else feeds into and informs it. It isn't the only starting position, but you can reach basically any point from it.

How much of that wealth is tied directly to the store chain vs investments they have made elsewhere?

The chain, itself, did $11B in revenue in 2020 for its ~100 stores. It's privately held, largely by the family and their friends. I certainly don't doubt they've purchased other investments with the proceeds over time, but they're making plenty.

>The chain, itself, did $11B in revenue in 2020 for its ~100 stores.

Revenue =/= profit. OpenAI has similar amount of revenue, but is nowhere near profitable.

>I certainly don't doubt they've purchased other investments with the proceeds over time, but they're making plenty.

The point isn't what they did with the profits, it's whether the profits are commensurate with the capital they put in (ie. return on equity).

> Revenue =/= profit.

I’m well aware. The assertion that gets made is “oh they’re low margin!” They are. But they have massive volume. So they make lots of money still.

> The point isn't what they did with the profits, it's whether the profits are commensurate with the capital they put in (ie. return on equity).

Well, they certainly didn’t start as billionaires a hundred years ago. The profits seem fine.

I’d be very happy to be in the business of selling $1 bills for $1.02, if the customer base is big enough.

Wegmans has long been known for an extremely high revenue per square foot for grocery stores, and their stake in it is absolutely worth billions.

I’d happily take 2-3% margins of their $11B in revenue (2020 per Wiki).