I think we're broadly in agreement but I'm responding to the bit about "What will happen to the 5% profit margin business? Do you think customers will keep rewarding them?".

If you only ever reward investments with high rates of return it leads to atrophy in boring yet essential sectors of the market. Supermarkets, like you mentioned, have a very low profit margin (usually 1-3%). Can you imagine what would happen if no one was willing to invest in a supermarket?