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What was the (net) profit margin for Walmart in the most recent quarter for which I can fund data? In other words, for every $100 of goods that Walmart sells, how much profit do they “take home?” My bet is that if you asked a typical person they would think the number would be very high – something like $20, perhaps more. So, how much out of a $100 do they actually take home?

Not $20, but rather $2.91. In other words, for every hundred dollars of goods sold by Walmart, they “keep” $2.91.

For some perspective, I just got back from buying a few small things from my local Walmart. While today I spent only a few dollars, consider “who gets what” when I spend $100 there. While I have no idea who gets paid what, when I look at my sales receipt I can surely see how much “society” gets when I buy $100 of goods from Walmart. Before I mention the data, note that the closest Walmart to where I live has located a few hundred yards from my home county of Monroe (in Ontario County) where sales tax rates are a little lower. So, on my bill, the total amount of sales tax collected was 7.5%, broken up as 4% for New York State and 3.5% for Ontario County.

Let’s recap. As a consumer buying $100 worth of goods from Walmart:

  • The government of Ontario County gets $3.50.
  • The government of the State of New York gets $4.oo.
  • Walmart itself gets $2.92.

But hey, neither Walmart nor you “built that.” We’ll have more to say about “You didn’t build that,” sometime next week. Have a great weekend.

6 Responses to “Friday Fun Facts – Walmart Edition”

  1. Doug M says:

    2.9%? I am astounded that it is that high! I would have been sure that it was less than 1%.

    My family was in the grocery business. 1-2% were the net margins. I would have thought that with a more competitive landscape, Wal-Mart’s volumes, and their prices, they would have been tighter margins. I guess their operations are that efficient.

  2. blink says:

    The juxtaposition certainly makes the comparison stark. In fact, it could be even “worse” if you considered how much UR paid you — and how much of that went to Monroe, New York, or the Federal Government — to fund your $3 contribution to Walmart. Outrageous!

  3. jb says:

    And of course that’s just the sales taxes. You didn’t even delve into corporate income taxes (state & fed) real estate taxes, etc.

  4. chuck martel says:

    It’s the same deal with gasoline. Government entities confiscate far more in taxes than oil companies realize in profits.

  5. Jesse says:

    As a caveat, some of what Walmart sells nowadays isn’t taxable most places. I think I read that Walmart is now the largest grocer in America. Food and clothing are usually tax free.

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