Can you think of one business that is doing great? Supermarkets! Everyone is flocking to the shops and filling their trollies with as much as they can (until limits were put in place).
If you’re like me, when you’re walking through the shops, you can’t help but wonder how much money are they making? Let’s find out.
It’s no secret, the supermarket giants in Australia are Woolworths and Coles. Who do you think is bigger? I have combed through their 2019 annual reports and compared their data. It is quite surprising.
It looks like the winner is….. Woolworths!!!! But not by much.
Woolworths is a larger business both in the number of employees and stores. Woolworths also makes more profit per store and employee.
It’s interesting to see that on average, each employee of Woolworths generates the company $13,897 in profit (EBIT). I thought it would be more! It’s not that much when compared to some of the biggest companies in the world. Apple makes nearly $400,000 per employee and they are only number 7 on the list.
Why is the profit per employee relevant? It’s fun to look at but it also show’s that the supermarket giants may not be as profitable as I originally thought. See, they do make a lot of profit, but they do it through scaling their business and employing nearly 200,000 people. Each new store or new employee adds a little extra profit per year for the whole company. But it also provides an extra job or a convenient location for customers to get their necessities.
I guess it’s expensive selling toilet paper.
Note EBIT – Earnings Before Intrest and Taxes. The information has been sourced from both Coles and Woolworths 2019 annual reports. In the interest of simplicity, some rounding has occurred and we have done some calculations based on that information (e.g. profit per employee). It is important to note that both Coles and Woolworths have business holdings outside of grocery stores and some of this may be included in the data. Hunger Daily does not make any guarantee that this information is correct and should not be used for any financial decisions. Always seek your own independent financial advice.