The gross and/or operating margin would be a more appropriate indicator.treva84 wrote: ↑Mar 14th, 2017 6:06 pmYup, it is a connivence store - generally people shop there for convenience / ease but of course you pay for it. From a business model point of view, this does afford them higher margins than places like Walmart or Superstore.
For example, Loblaw's has net margins of 2.12%; Walmart has net margins of 2.81%; Couche Tard has net margins of 3.50%.
The net margin takes into account interest payments and corporate taxes, and therefore is not adequate when comparing companies that have different interest and tax rates.
Using your example, Loblaw sees higher gross margins than Couche-Tard (28% vs 18%), but ends up with a lower pre-tax operating margin.
One of the reasons is that Loblaw has higher employee payroll & benefit costs (11% of total sales vs 5% for ATD).