I have the choice of probably 10 or more
full size grocery stores within an hours drive.
I live in very rural Hawaii.
I guarantee you they make very good money,
however it is the distributors/wholesalers
that make all the money and essentially set the prices.
Stores have to deal with the public. Distributors and wholesalers don’t have to, and refuse to deal with the public.
I get most all my non-perishable food items from Amazon or from other on-line suppliers, delivered to my home cheaper than local stores that I must drive to.
I have space and money to buy things in bulk.
Most people don’t.
They make money in volume because most customers shop there weekly. But at the end of the day, 1.6% is a shoestring. Moronic ideas like hers will reduce that to 0% very quickly. Very quickly.