January the 22nd, 2025 – A planned Croatian retailer boycott has been the topic of a message that has been circulating around social media recently, but how much sense does it actually have?
Spiralling prices and wages that don’t match are an age-old topic in Croatia at this point, and plans for the 24th of January indicate a Croatian retailer boycott in response. Some say that understandable frustration is being sent in the wrong direction.
As Poslovni Dnevnik writes, Tajana Barančić is the founder and CEO of Astra poslovni inženjering/engineering, a company specialising in business consulting and accounting services. She’s also the president of the Supervisory Board of CISEx, an association of independent software exporters. She recently took to Facebook to address the upcoming Croatian retailer boycott.
In her post, she stated the following: “I can see that this situation has become heated, meaning that various kinds of financial data from individual chains is being used and mentioned, but it’s often not being interpreted precisely. In companies engaged in trade, it’s easy to calculate their gross margin: the ratio of sales revenue to the purchase value of goods sold (this is the value at which they purchased the goods they then sold).
I’ve now looked at the data for Plodine, Spar, Lidl and Konzum for 2022 and 2023 and they’re all around 25% (plus/minus a couple of percent, the cost of purchasing in sales revenue), with the differences in percentage over the years being negligible (I don’t see any growth). All other business costs are then covered by this price difference. Of course, there are other business revenues that can be diverse, but don’t affect this primary difference in price and cost of purchase (there are some subsequent annual discounts).
When net profit increases (or decreases), it isn’t necessarily (and in these cases that I looked at it definitely is not) due to a significant increase in gross margin. The reasons may be lower depreciation, some additional income (for example from the sale of fixed assets), or from the optimisation of business processes that reduce costs.
I’m always in support of civil rebellion, but I’m not sure that this time it’s being aimed at the right address.
The purchase price is obviously high. It would make much more sense to boycott individual items or suppliers that can be proven beyond a doubt to be much more expensive in Croatia than elsewhere. Then,the retail chains would have additional strength to negotiate better conditions. Incidentally, this hype about boycotting retail chains suits the government perfectly because they’ ve now found a “culprit” to take on the role of the villain.