My old landlord's wife worked for a massive chain grocery store here in Canada... she was in charge of launching new stores (hiring/training the new staff, ensuring the building layout and initial...
My old landlord's wife worked for a massive chain grocery store here in Canada... she was in charge of launching new stores (hiring/training the new staff, ensuring the building layout and initial product stocking plans were followed, etc). Her and I talked about this a few times over tea.
It's remarkable how much work goes into store layouts that most people aren't aware of. The chain she worked for actually had a team of psychologists that designed the stores layouts in order to maximize sales. As this article suggest, everything, from where the gum is located by the register, to the promotional displays at the end of the aisles, is carefully considered, calculated with the metrics tracked to ensure they are correct. None of the placement in a grocery store is by accident... although not everything is pre-planned by the stores themselves. Brands actually have to negotiate their product placement in aisles, so often times that's why Nestle, Johnson & Johnson and all the other big multinational conglomerates get the "best", most prominent (eye-level), locations, because they can afford to lower their margins the most while still making a profit, but the small brands and independent product companies can't.
It really is kinda crazy and quite interesting how much research and thought goes into supermarkets. Even reading and knowing about their tricks don't really help.
It really is kinda crazy and quite interesting how much research and thought goes into supermarkets. Even reading and knowing about their tricks don't really help.
A friend of mine is an architect for a small-scale (20 store) corporate grocery chain and another friend owns an inner city upscale grocery store. I had always assumed my architect friend worked...
A friend of mine is an architect for a small-scale (20 store) corporate grocery chain and another friend owns an inner city upscale grocery store. I had always assumed my architect friend worked primarily on the building architecture, but he spends most of his time creating store layouts. Talking with both of them about their jobs was quite fascinating. The architect works with psychology and marketing consultants, data analysts, the store managers, vendors, and corporate management on the store layout. His chain specifically targets locations where there is no/little competition (small towns), yet their product placement is still quite sophisticated. I knew things like staple items being placed in the back corner of the store, but it goes far past that even as of 10 years ago when we first started talking about his job.
The store owner friend (only one store) spent a lot of his time discovering, negotiating with, and managing vendors. One thing that isn't discussed in the article is the amount of "woo-ing" those vendors do to influence their clients - things like suites at sports stadiums, special dinners and parties, etc. That happens in every industry, but it definitely a huge factor that vendors use to secure preferential placement.
Additionally, there are two primary pricing models for large grocery chains - every day low prices and bargain-based prices. The two major grocery chains in my city represent each, respectively. The every day low price store ensures staple items are sold at the lowest possible price consistently, and the high-value items are priced at considerable markup. The bargain-based store puts out weekly fliers emphasizing their promotions: buy-one-get-three, meal value deals (buy all the taco ingredients and get free tortillas) and similar type deals that are loss leaders and undercut the competitor. However, all the other items in the store are highly variable pricing - updated weekly - so unless you really pay attention and only buy the bargain/sale items, your total bill can easily exceed what you'd pay at the other store. Both models have their merits.
This is tangential, but something I've thought about in the past week: I've read a bunch of studies in the past about "food deserts" in cities and always assumed it referred to areas that are served by convenience marts rather than grocers (ie: twinkies are available, but carrots are not). I live near the downtown area of a small city. There are two grocery stores within a mile of my home, and a few nicer grocery stores within 3 miles. I walked to the closest store a week ago to pick up something for lunch and had a hell of a time finding healthy food. Outside of fresh produce, there weren't any healthy options. The nicer grocery stores have a variety of pre-prepared foods, frozen foods, etc. To give a concrete example - the only "healthy" food in the frozen food section was plain frozen vegetables. Everything else was high calorie with low nutrtional contents - pizza, burgers, fried chicken, etc. It made me curious if there is good data on nutritional content availability per grocery store. I haven't been able to find that data if it exists, but I am most curious what variables result in that product offering trend.. if the trend even exists. Is it simply a matter of the market demand, promotional offering from vendors, price sensitivity, etc. - what results in the pricing structure they use?
I've been saying it for years now and all my friends have dismissed me as a lunatic. It's nice to see some validation as this information is pushed more main stream.
I've been saying it for years now and all my friends have dismissed me as a lunatic. It's nice to see some validation as this information is pushed more main stream.
My old landlord's wife worked for a massive chain grocery store here in Canada... she was in charge of launching new stores (hiring/training the new staff, ensuring the building layout and initial product stocking plans were followed, etc). Her and I talked about this a few times over tea.
It's remarkable how much work goes into store layouts that most people aren't aware of. The chain she worked for actually had a team of psychologists that designed the stores layouts in order to maximize sales. As this article suggest, everything, from where the gum is located by the register, to the promotional displays at the end of the aisles, is carefully considered, calculated with the metrics tracked to ensure they are correct. None of the placement in a grocery store is by accident... although not everything is pre-planned by the stores themselves. Brands actually have to negotiate their product placement in aisles, so often times that's why Nestle, Johnson & Johnson and all the other big multinational conglomerates get the "best", most prominent (eye-level), locations, because they can afford to lower their margins the most while still making a profit, but the small brands and independent product companies can't.
It really is kinda crazy and quite interesting how much research and thought goes into supermarkets. Even reading and knowing about their tricks don't really help.
A friend of mine is an architect for a small-scale (20 store) corporate grocery chain and another friend owns an inner city upscale grocery store. I had always assumed my architect friend worked primarily on the building architecture, but he spends most of his time creating store layouts. Talking with both of them about their jobs was quite fascinating. The architect works with psychology and marketing consultants, data analysts, the store managers, vendors, and corporate management on the store layout. His chain specifically targets locations where there is no/little competition (small towns), yet their product placement is still quite sophisticated. I knew things like staple items being placed in the back corner of the store, but it goes far past that even as of 10 years ago when we first started talking about his job.
The store owner friend (only one store) spent a lot of his time discovering, negotiating with, and managing vendors. One thing that isn't discussed in the article is the amount of "woo-ing" those vendors do to influence their clients - things like suites at sports stadiums, special dinners and parties, etc. That happens in every industry, but it definitely a huge factor that vendors use to secure preferential placement.
Additionally, there are two primary pricing models for large grocery chains - every day low prices and bargain-based prices. The two major grocery chains in my city represent each, respectively. The every day low price store ensures staple items are sold at the lowest possible price consistently, and the high-value items are priced at considerable markup. The bargain-based store puts out weekly fliers emphasizing their promotions: buy-one-get-three, meal value deals (buy all the taco ingredients and get free tortillas) and similar type deals that are loss leaders and undercut the competitor. However, all the other items in the store are highly variable pricing - updated weekly - so unless you really pay attention and only buy the bargain/sale items, your total bill can easily exceed what you'd pay at the other store. Both models have their merits.
This is tangential, but something I've thought about in the past week: I've read a bunch of studies in the past about "food deserts" in cities and always assumed it referred to areas that are served by convenience marts rather than grocers (ie: twinkies are available, but carrots are not). I live near the downtown area of a small city. There are two grocery stores within a mile of my home, and a few nicer grocery stores within 3 miles. I walked to the closest store a week ago to pick up something for lunch and had a hell of a time finding healthy food. Outside of fresh produce, there weren't any healthy options. The nicer grocery stores have a variety of pre-prepared foods, frozen foods, etc. To give a concrete example - the only "healthy" food in the frozen food section was plain frozen vegetables. Everything else was high calorie with low nutrtional contents - pizza, burgers, fried chicken, etc. It made me curious if there is good data on nutritional content availability per grocery store. I haven't been able to find that data if it exists, but I am most curious what variables result in that product offering trend.. if the trend even exists. Is it simply a matter of the market demand, promotional offering from vendors, price sensitivity, etc. - what results in the pricing structure they use?
I've been saying it for years now and all my friends have dismissed me as a lunatic. It's nice to see some validation as this information is pushed more main stream.
I'm really bad for buying multiples. Lately, I've been trying to work in that and really think about how much I need and how much I'm actually saving.