How do produce stands in NYC, Montreal, and other major cities sell their items for less than most big box chains?


In NYC, there are plenty of produce vendors on the street that sell aesthetic, fresh fruit for less than cost conscious mega-chains, like Wal Mart, Trader Joes, and Wegmans. The big chains have negotiating power, wholesale discounts, and economies of scale to help them profit on tiny margins. So, how is it that my small, local, fruit stand can outcompete pricewise with national chains and still stay afloat?

In: 2607

There is normally a food terminal in city where produce arrives. Everyone can go and bid on the produce. The buyers for the big supermarkets will probably be buying 100 crates. But then they have to put them in that trucks and take them to that distribution center and repackage them and send them to the store and that cost a lot of money.

The little stands bid on 1 or 2 crates, then throw them in the back of the van and drive to the side of the roads with very little overhead. They’re not paying for a refrigerator distribution center or rent and maintenance on a massive supermarket.

The lack of cost that they have between bidding at the food terminal and selling at the side of the road is why it’s cheaper for them.

Edit: fixing a couple of words from drunken voice typing

The small corner stand has significantly less overhead than any of the big stores. So while the large chains are able to negotiate and buy very well, they still need to make a minimum amount to cover their large bills, not to mention they have to account for the fact that much of their merchandise might go unsold.

A small guy might only buy a few crates amd can sell it for less because he doesn’t have the same overhead to cover, and if he can’t sell it all he takes it home to help feed his family.

Tagging on to the other comments here:

Additional overhead not found in market stands: exorbitant executive salaries, accountants, human resources, other administrative positions, building ownership and maintenance.

The fruit stands also buy the ripest fruit, which they can get for lower prices. It tastes good, but ripe also means it’s going bad in a few days. Grocery stores need a certain amount of shelf life, but a small cart can pick up a box of strawberries and sell most of it that same day. If they don’t buy it it’s going to spoil, so they get a good deal.

Note that not all small grocers use the same supply chains as the big box stores. Chinatown in NYC famously had a separate supply chain, farms growing produce just for them and not selling into the normal major commodities markets, etc. Here’s a random article discussing it, surely there is more info on the current situation available: