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How do grocery stores make money? I'm curious to know how grocery stores broadly work in the context of making money or staying profitable. I know they have their loss leaders on certain commodities e. I also know they put more expensive items at eye level. Rather than specific tactics they employ, I want to know on a more broad level how they stay profitable. How important is advertising? How important is customer loyalty?

What times of year are most profitable? How do they compete with other grocery stores?

The grocery industry works at about a 1. That's why they are always the first store open after a big storm. They cannot miss a day of sales. The amount of money that a grocery store brings in on an average day in mind blowing. Grocery inventory is unique in retailing in that it literally will rot on the shelf if not sold.

They are all about turn over. That's why they run so many sales. They need to get those items sold or they take a huge loss. The layout of a grocery store is backed by tons of scientific data.

Look at what's in the back that you see every time you walk down a row.

That's their high-profit item. Produce is always immediately when you walk in as it's pretty and they want you to buy it so it doesn't rot. There's an entire aisle dedicated to cereal. Why do so many grocery stores bake their own bread? Because customers buy more when they are in a grocery store that smells like freshly baked bread. Nothing is done without a specific and well thought out reason.

Customer loyalty in general is so important in retail. Until the 's retailers were focused on the casual customer. Then a book came out whose title escapes me, that changed all that. It turns out there are good and bad customers. The bad ones are the casual ones that would just assume shop anywhere. The good ones are the ones that keep coming back to your store on a how does supermarkets make money basis.

That may seem obvious now but it's only a generation back when the opposite was the norm. Grocery stores live for Thanksgiving and Christmas. Retail in general lives 11 months in the red just to get to Xmas.

Grocery Store Money Making Tricks - Business Insider

Grocery also loves the summer as folks cook out more and eat more high profit meat. Competition between stores can vary. In Texas where I live HEB is king partly due to Texas pride.

The weekly housewife shopper prefers going to the same store as they know where everything is and can get in and out in the more efficient time. Go shopping with a mom sometime.

They know "their" store like the back of their visual trader forex. The HEB near me remodeled a couple of years ago and for months had dedicated folks walking the floor helping people adjust to the new layout. Do you know where I can find references for your claims? Not that I don't believe you it's just that I don't know where to start my research and I figure those references can lead to other references.

How was HEB able to capture "Texas" pride? Were there not other Texan grocery stores? Is this sort of psychology similar in other states? Not the "Texas pride" part but the part about having a store as how does supermarkets make money store.

15 Ways Supermarkets Trick You Into Spending More Money - Business Insider

I would start here. FMI should have everything you need. I've been in the retail technology industry for 16 years so a lot of my knowledge is from talking to knowledgeable people in the industry.

Most of my experience is in general retail though. HEB is based in San Exotic options trading de weert pdf and advertise heavily that they are a Texas company.

People in Texas like to shop with Texas companies. Although it it ironic that they buy Mexican-made Ford F's. All the Texas made Forex history data metatrader trucks come with stickers that say "Texas Made" on them.

There are other grocery stores in Texas like Randals, Kroger and Whole Foods also Texas based but they're in Austin which isn't really Texas; source: I live in Austin. Having a "your" store is every retailers goal. They want to be "your" store.

This is world-wide in retail.

I Ran My Own Supermarket And Here Is What I Learnt - UpgradeReality

Retail technology is any technology the retailer uses. Everything from their e-Commerce platform, to their point-of-sale software and hardware, to their merchandising system, to their inventory system, etc. POS will be the first to die. The modern POS application as it is currently utilized will disappear within 10 years. It will evolve into an extension of an enterprise retail platform that feeds data from a single data source to all applications in-store and backend.

Eventually, I think POS will no longer exist in stores. Customers will use the retailers application on their phone to make purchases.

If they happen to be in the store, and the item is in available to sell inventory, they will get it "delivered" instantly. Buy low, sell high. They buy thousands, maybe even millions of the same product at a ridiculous percent of what they charge. They distribute their bulk to their individual stores. E is for explain. This is for concepts you'd like to understand better; not for simple one word answers, walkthroughs, or personal problems.

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Oh, and economies of scale. Where is that industry headed? Thanks for your help! I really appreciate it. I don't mind answering your questions. I'm happy to help. Posts are automatically archived after 6 months.