Ask a Grocer

Maimonides · Mar 2, 2007

Hello, everyone!

I own & operate a grocery store and have several years of experience in the food industry. I thought this thread might be informative for lots of people. I can answer almost any question relating to the grocery/food industry such as, but not limited to:

How do coupons work?
What careers are available?
When is (insert a vegetable or fruit) in season?
Where does (insert any product found in a grocery store) come from?
Where do I find (insert a hard to find or specialty food item)?
Who makes (insert product name)?
Paper or plastic?

Why does my local grocery store have such & such a policy?
Is spinach safe to eat now?
Et cedera.

Understanding that this is a business related topic, I have no intention of promoting or marketing my business or anyone else's. I won't reveal anything that may help my competitors; just things that everyone in the industry knows & that the public should. I won't reveal even where my store is exactly located. My intention is to inform & answer questions.

Thanks to Mathilda for permission to create this thread.

Fire at will!

Turner · Mar 2, 2007

I read somewhere that the profit margin of a grocery is really low, like 1 or 2 percent. Was that accurate? And how does a store make a profit if the profit margin is so low? How does the store make money when it does sales and two-fers?

El_Machinae · Mar 2, 2007

How does your relationship with VISA affect your bottom line? Would store owners be better off if you could get people to use cash or interact instead?

Turner · Mar 2, 2007

El_Machinae said:
How does your relationship with VISA affect your bottom line? Would store owners be better off if you could get people to use cash or interact instead?

I'm not a grocer/retailer, but I did hear a story recently regarding credit cards and small business'. Bear with me for a moment. I had a tire blow out (I thought it was flat, the blowout was where I couldn't see it) and after spending quite a bit of time trying to fix it myself, eventually the sheriff called a tow. He discovered the blow out and took me back to his shop to get it fixed. After all was said and done, it was actually a pretty reasonable cost for his services - $30. Unfortunately, all I had was $20, and I wouldn't presume to talk him down. Especially after all he did. His parter was reluctant to take my credit card, and my checkbook was in my car (we just took the tire with us). On the way back to my car, he explained that he recently had a stranded motorist pay with a fleet card. I don't remember which one. But after all was said and done he saw about 12% of what he charged the guy for. He charged him $10, and got about $1.25 after all the fees were taken out.

JonnyB · Mar 2, 2007

How much food ends up in the dumpster?

Godwynn · Mar 2, 2007

Turner said:
I read somewhere that the profit margin of a grocery is really low, like 1 or 2 percent. Was that accurate? And how does a store make a profit if the profit margin is so low? How does the store make money when it does sales and two-fers?

When I was in training the video said that one dollar out of every 100 spent in the store is profit, so yes 1% is accurate for Kroger. The profit margin is higher on stuff like Frozen foods, individual packages of candy and whatnot, which is to offset the things that are lost, misplaced, or damaged.

The store does necessarily make money off of sales. They are put in place to draw more customers in to hopefully buy other things. For example the bread and milk are placed on opposite sides of the store, so when one is on sale the customer has to pass through every other part of the store.

Godwynn · Mar 2, 2007

JonnyB said:
How much food ends up in the dumpster?

A very large amount. Think of everything in the bread and milk aisles. All of those have around two weeks to be sold. Meat is the same way. The actual canned things last the longest, but if a can has a dent in it we must scan it out of the system and throw it away. The Produce section has to throw away fruit and veggies that are bruised as well. Probably around $500-$750 worth of food is thrown away daily for my medium sized Kroger store. It is probably safe to assume it fluctuates with the size of the store.

Godwynn · Mar 2, 2007

El_Machinae said:
How does your relationship with VISA affect your bottom line? Would store owners be better off if you could get people to use cash or interact instead?

I am not a manager but I think it did not bode well for us, so we made our own credit card. :lol:

Stylesjl · Mar 2, 2007

Do you operate a franchise or work for a company or is it your own buisness with it's own name?

Is your store allowed to sell both Coke and Pepsi? (I recall that in some cases Coke will have a contract that states that they can't sell competing drinks if they sell coke)

What are the buisiest times of the day? What are your trading hours?

And do you ever have problems with competitor espionage? Like when neighbouring stores send staff to write down prices and accordingly lower theirs?

Ansar · Mar 2, 2007

Which do customers usually prefer, Paper or Plastic?

Which one do you think is better? Why? (I personally see plastic as completely superior, especially because is has handles so you dont have to literally carry it.)

Do you buy stuff from your own store?

.Shane. · Mar 2, 2007

How do you compete against chains and the big box stores?

Godwynn · Mar 2, 2007

Stylesjl said:
Is your store allowed to sell both Coke and Pepsi? (I recall that in some cases Coke will have a contract that states that they can't sell competing drinks if they sell coke)

We sell both, although both companies have their own employees come in and stock the shelves themselves. The Coca-Cola people are much nicer than Pepsi.

What are the buisiest times of the day? What are your trading hours?

Busiest times are about 5-7 p.m. when everyone gets off work. It get really bad on Senior Citizen Day when they get 10% discounts and near the first of the month when Link Cards are recharged, they get 100% discounts.

And do you ever have problems with competitor espionage? Like when neighbouring stores send staff to write down prices and accordingly lower theirs?

Yes, we always have IGA, Wal*Mart, and Mad Pricer call us asking for prices of certain items. We are no longer allowed to give out prices over the phone. Although my own company goes into their stores and checks their prices manually.

Sorry for answering for him, two opinions can be helpful!

GinandTonic · Mar 2, 2007

What products do you have to sell as perminant loss-leaders/ cost to draw in the punters?

Godwynn · Mar 2, 2007

ansar said:
Which do customers usually prefer, Paper or Plastic?

Plastic, definently.

Which one do you think is better? Why? (I personally see plastic as completely superior, especially because is has handles so you dont have to literally carry it.)

Plastic, it is cheaper. You may have noticed recently that we changed our bags color from white to brown, it is 1/2 penny cheaper per box I believe.

Do you buy stuff from your own store?

Us employees get a discount on all Kroger brand items. If it is a name-brand item that is cheaper elsewhere I will go there to get it.

.Shane. said:
How do you compete against chains and the big box stores?

Resistance is Futile. :mwaha:

Ansar · Mar 2, 2007

Godwynn said:
Yes, we always have IGA, Wal*Mart, and Mad Pricer call us asking for prices of certain items. We are no longer allowed to give out prices over the phone. Although my own company goes into their stores and checks their prices manually.

Whoa! I never knew stores were that competitive! :eek:

Godwynn · Mar 2, 2007

ansar said:
Whoa! I never knew stores were that competitive!

Well, there is only so much money available for grocery, and as I have said before our profit margin is small. It's a battlefield.

Bill3000 · Mar 2, 2007

What do you think of Walmart?

Turner · Mar 2, 2007

ansar said:
Godwynn said:

Yes, we always have IGA, Wal*Mart, and Mad Pricer call us asking for prices of certain items. We are no longer allowed to give out prices over the phone. Although my own company goes into their stores and checks their prices manually.

Click to expand...

Whoa! I never knew stores were that competitive!

Oh yeah. I temped at a Dillons (Kroger) back in '94. They had just remodeled and everything was moved around. So I walked around the store and showed everyone. HyVee had just put a store in Lawrence, where I lived, and they were doing price wars. It was funny. The girl from HyVee was a bit nervous at first, but the Dillons managers never kicked her out.

JollyRoger · Mar 2, 2007

Did any grocer here survive the Cola Wars of '85? I did, but the introduction of paper vs. plastic in '86 drove me out of the game.

Desmond Hawkins · Mar 2, 2007

I thought the point of an "Ask a" thread is that eventually the thread starter is supposed to answer.

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