National cereal manufacturers receive high margins for many of their cereals, often ranging from 60-75 percent. By contrast, the large retail grocery...

National cereal manufacturers receive high margins for many of their cereals, often ranging from 60-75 percent. By contrast, the large retail grocery chains (Kroger, Safeway, etc.) that sell cereal make much smaller margins. What would explain this divergence in margins?

National cereal manufacturers, being the manufacturers are able to gain a higher profit marginas their level of value addition is much higher than that of the retail stores. Moreover they do not...