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.
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.
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!
And of course that’s just the sales taxes. You didn’t even delve into corporate income taxes (state & fed) real estate taxes, etc.
It’s the same deal with gasoline. Government entities confiscate far more in taxes than oil companies realize in profits.
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.
I’d like to see how Walmart’s tax liability compares to others, like Amazon or Apple or …