Eli5 How do grocery stores around the world afford to be fully/half stocked in a product 24/7 simultaneously even in small towns where not everything’s bought?
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In 2019, I drove from Toronto to Tofino BC through Canada, and back through the US Northwest. We stopped at a gloriously named ‘Kum and Go’ in some small town in Montana for gas and snacks.
Tired of the usual chips and chocolate bars, I was amazed to find Ritter sport bars, and *flavoured* Perrier. I remarked to my GF that the North American distribution system is a wonder; that here we were, in the relative middle of nowhere, but German chocolate bars and varieties of French sparkling water were available in a gas bar, not some specialty shop or even a supermarket.
This is Adam Smith’s ‘invisible hand’ in action. Who ever the buyer was for that store, he had no idea I was coming, or that I would be sick of chips and diet Coke at the time. But at some point, some buyer must have tried an order of Ritter bars, and when they sold, kept ordering them. Presumably, if the demand for them was high, he’d order even more. If the demand dropped off, he might not order any more. At some point, a steady state is reached where the orders and the sales more or less match.
So, that’s the answer, OP. Through an organic process of trial and error – some stores will buy products that don’t sell, and eat the loss on those, e.g. – retail outlets match their orders to what sells. If I were a retail buyer, I’d certainly allocate some percent to ‘new products’, so that I can see what new things my customers like or don’t like, but in a high volume retail space, managers can do a good job of matching orders and sales for existing products.
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