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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I had meetings about selling a product in a major retailer.
They stock my product. I get paid as it sells. There is a reason you don’t see many small, hometown, type brands in major retailers. They can’t afford to carry the overhead required to stock stores. They also tell you what they’ll be paying for it. It’s take it or leave it.
They also sell shelf space. The most valuable shelf space in a grocery store is the frozen food section. It’s insanely competitive.
Due to how sales and buying for those products works, some items sell very slowly and are ordered very infrequently, while other items sell quickly and the store buys the appropriate amount to support those sales (usually 4-14 days of product at the big places).
In terms of how they afford it, most suppliers are on a Net 14 or Net 30 payment structure, so the store gets 14 or 30 days to sell the product and make money from sales before payment is due for those items to the supplier.
In a small town or shop where things sell slowly, they will only need a small amount of product to support demand, whereas in a busy store they will frequently have larger and more regular deliveries to compensate for the demand on their inventory. That’s how they “stay full” at different volumes.
I oversee purchasing for a grocery store chain with some very high volume locations and some very low volume locations, this is basically all I talk about at work.
This is what precisely inventory management and supply chain management are all about. A competent company will have mechanisms in place to quickly and accurately keep track of the inventory on hand, as well as create forecasts for how much needs to be ordered.
I was at a grocery store in the middle of no where that got milk delivery on Thursday. If you went on Wednesday you likely wouldn’t get milk. Also minimal selection. Eg They had cereal but only certain types
>simultaneously even in small towns where not everything’s bought?
In reality, they don’t.
There’s a reason most small grocers have gone out of business to regional Walmarts. In more urban areas it’s easy, but most of rural America is a [food desert](https://en.m.wikipedia.org/wiki/Food_desert). In fact,. [13.5 million Americans](https://www.usda.gov/media/blog/2011/05/03/interactive-web-tool-maps-food-deserts-provides-key-data#:~:text=The%20Locator%20identifies%20about%2010,to%20sources%20of%20healthful%20food.) live in food deserts. And even for areas that don’t meet the qualifications for food desert, it’s not uncommon in rural America for the only grocery store option in town to be a Dollar General and the nearest fresh foods to be the Walmart 30+ minutes away. And Walmart only survives in those locations by surviving multiple towns over a huge geographic area.
Small towns don’t have grocery stores any more because it isn’t affordable.
Not sure if anyone’s mentioned it, but I used to work for a gas station. There were a couple different vendors/suppliers. Most of them were as you’d expect. You say you need x amount of y products, you pay for that, and they deliver it and it’s now 100% your responsibility. But there were also vendors that would supply us products, but we’d only have to pay once they were sold. It’s only technically the stores property for a split time when you check out. For these products, if they go expired, it wouldn’t be the stores problem. We’d set it aside and when the vendor would come next time, they’d pick up any products that is still technically theirs and expired, and gave the store a bit of credit for the loss of goods
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