Grocery Luxury -- For All
A post by Steven Horwitz at Library of Economics and Liberty made me realize something I hadn't noticed -- how luxuriously even people of average income eat these days. Horwitz writes:
I have written much about the extraordinary increase in living standards1 that Americans have enjoyed over the last century, and especially in the last forty years. For me, one of the best indicators of this incredible progress can be seen in the evolution of the grocery store....The grocery store is in many ways a metaphor for the increase in American living standards experienced by both rich and poor. Those of us who remember the 1970s have perhaps the best sense of this evolution, as we can remember what even good grocery stores were like back then. Stores were generally small, not well lit, not always clean, limited in the variety of goods they stocked (especially fresh produce), and lacking in the prepared foods we take for granted at most grocery stores today.3
The 21st century American grocery store, by contrast, is a marvel of higher quality, lower cost, and expanded variety. There is simply no comparison between the quality of the produce, meats, and bread available at even a large middle-market chain like Kroger today and what was available anywhere in the 1970s. Measured in terms of labor hours required for purchase, food has generally never been cheaper. We see that today, as poverty in America is far more likely to be associated with obesity than with being underweight.
...An example from the evolution of the grocery store illustrates this point. In the 1970s, there were maybe five or six kinds of potato chips (regular, barbecue, sour cream and onion, ruffled, tortilla chips, and the stuff in the can). Today, the typical grocery store has a potato chip aisle that offers dozens of differentiated products along numerous dimensions. This increase in variety allows consumers to satisfy their preferences more precisely, increasing their subjective well-being. You want your gluten-free, lactose-free chocolate chip cookies? You can probably find them. You want your throwback taco-flavored Doritos? They're there. The expansion of variety in the typical grocery store has dramatically increased the subjective well-being of American consumers in ways that macroeconomic measures like GDP cannot capture.
...The Best Is Yet to Come
The next steps in the evolution of the grocery market may be driven by Amazon's purchase of Whole Foods. My own prediction parallels Ruhlman's in Grocery: we'll see the center of grocery stores shrink, as dry goods come from Amazon or warehouse stores. The perimeter of grocery stores will remain, as produce, meat, baked goods, dairy, frozen foods, and prepared foods will continue to be demanded in increasing quality and variety....I also expect to see the return of specialty butcher stores and bakeries, and the increase in the number and popularity of farmers markets is evidence of that trend. In some ways, this is a return to the past. Before the rise of the supermarket, Americans bought their produce, baked goods, and meats at different places. But now, the quality and variety will be greater, and competition from everything from Amazon, to high-end grocery stores, to warehouse clubs, to big box retailers will ensure that Americans of all income levels have a variety of options to meet their own ability to tradeoff more precisely on the multiple margins of time, quality, convenience, and price.
Meanwhile, grocery stores are adding restaurants and bars -- and even a bocce court in one location.
Another possible innovation -- reported by Lauren Hamer at CheatSheet:
Grocery stores will come to you. As urban areas continue to expand across the country, grocery stores in the future will need to get overly creative when it comes to access. Some cities already utilize the pop-up grocery concept which provides food sources to urban areas where parking and commuting are difficult. This could be implemented on a wide scale should major chains catch wind and narrow down a workable process.In this instance, supermarket chains will morph into a grocery store on four wheels, offering the communities access to food staples and household provisions on a reoccurring basis. Think: food trucks, but with more variety.
Hey, Hey, Bernie Babies!
You say you want Socialism?
Here’s an experiment:
Take a walk through a typical American, for profit, immoral capitalist grocery store - Kroger, Albertsons, nothing fancy like Whole Foods, just a common one where common folks shop. Look around. Check the quality, quantity and variety, and the prices.
Now, look at pictures of the empty shelves of stores in Venezuela. That’s photos of “The Maduro Diet.” In 2016, 3 of 4 Venezuelians lost at least 19 lbs., and more in 2017. With 13,000% annual inflation, the money’s not worth much, so there’s nothing to buy. Before becoming a Socialist Paradise, Venezuela was a food exporting nation.
You say you want Socialism? That’s your future.
Wfjag at May 9, 2018 11:23 PM
Fruit was once scarce and expensive in winter. Now we make jokes about fruitcake, when it once would have been a treasured gift.
tmitsss at May 10, 2018 1:12 AM
Not ironic: Life is getting better in fantastic ways that no one ever talks about.
Crid at May 10, 2018 1:40 AM
Nonetheless: For anyone interested in the ways our culture is being corrupted by Amazon's impending dominance of home grocery delivery, I would strongly recommend watching this entire video. If you can't see it all, he starts talking grocery at 28 minutes or so.
Crid at May 10, 2018 2:29 AM
This is a story about the time a socialist went grocery shopping in a capitalist country.
In 1989 Boris Yeltsin visited the Johnson Space Center in Houston. Afterward, he made an unscheduled trip to a nearby Randall's grocery store. Marvelling at the thousands of cans of food, rows of fresh seafood and produce, and boxes of Jell-O Pudding Pops, Yeltsin left the Communist Party within two years of that visit.
Conan the Grammarian at May 10, 2018 5:41 AM
The Yeltsin example is so perfect.
These screeching critics of capitalism would not like the world they're trying to push us into.
I always have to laugh when I see them holding an iPhone or wearing Nikes.
Being true to the cause would mean tossing that iPhone in the sewer.
Amy Alkon at May 10, 2018 6:47 AM
Yeltsin was late to the scene. I give you Viktor Belenko:
https://seanmunger.com/2013/09/06/the-odyssey-of-viktor-belenko-a-fascinating-footnote-to-the-cold-war/
I R A Darth Aggie at May 10, 2018 7:30 AM
Being true to the cause would mean tossing that iPhone in the sewer.
Not if you're a duly constituted apparatchik. Then you get only the best! Poverty is for little people. They deserve neither caviar or iPhones.
I R A Darth Aggie at May 10, 2018 7:34 AM
The DDR (German Democratic Republic), aka East Germany, looked with jealousy on the West German Volkswagen, an inexpensive car for the masses that came to symbolize Germany's post-war economic recovery, and decided to build their own.
The car they built was the Trabant. In its inception year, 1959, it was a passable car. The Trabbi used a 2-stroke engine with two cylinders. Its top speed was 62 mph and it took 21 seconds to accelerate to that from a standing stop.
The Trabant was already an antique when mass production began in 1964. Unchanged thirty years later, it was an even bigger piece of junk. According to Time's list of the 50 worst cars of all time, "This is the car that gave Communism a bad name. [...] Trabants smoked like an Iraqi oil fire, when they ran at all, and often lacked even the most basic of amenities, like brake lights or turn signals."
The waiting list for a new Trabant was 15 years long. Used Trabants commanded a higher price than new ones since a buyer could take possession of a used one immediately, without the 15 year wait.
While West Germans were driving modern fuel-injected Volkswagens, BMWs, Opels, Mercedes, Porsches, and Audis, East Germans were driving 2-stroke Trabants with a gravity-feed fuel system in which the fuel tank had to be mounted above the engine. In thirty years West German cars gained features like airbags, anti-lock brakes, and crumple zones. The Trabant gained a fuel gauge.
Marx had decried the waste of producing multiple models of the same product, with no discernible difference but what advertising could attribute to the product. However, he ignored that competition makes products better - that Audi, competing with BMW and Mercedes, must keep pace with them in terms of safety, efficiency, and design in order to stay in business. Western cars were marvels of incremental improvement.
When the Berlin Wall came down in 1991, hundreds of thousands of Trabants were simply abandoned by the side of the road as East Germans made a beeline to the nearest Volkswagen or Opel dealer.
Conan the Grammarian at May 10, 2018 8:13 AM
HEB's Central Market stores have been offering cooking classes, wine tastings and classes, culinary trips overseas, and even live music for years now.
Conan the Grammarian at May 10, 2018 8:27 AM
The market can solve many (not all) problems. In your typical grocery store now you can find diabetic, low-fat, and gluten-free foods. No one commanded that. The impulse of politicians to "solve problems" is always ham handed, and likely counter-productive.
cc at May 10, 2018 8:48 AM
Cheap, plentiful, and varied basic goods are the cornerstone of a wealthy society. People like to spend as much money as possible on status items. But what makes it possible to spend on those status items is having a cheap basic cost of living.
Which is why I snicker when Californians talk about separating and going their own way. Yes California has a very high GDP. But due to the high taxes the majority of goods that make up that GDP are luxury items. Separate and you will have olives but no bread. IPhones but no electricity to power them. Those luxury goods can be lost with little real impact in people's lives. But the basic necessities cannot be done without.
It is a bit ironic that the most important things also need to be the most insignificant things at the same time.
Ben at May 10, 2018 9:20 AM
I disagree with both Horwitz and Galloway on Amazon. The key issue is Amazon pays an effective total tax rate (federal, state, local, ...) around 13% (according to the NY Times). Kroger for comparison pays around 34%. The two companies have similar gross profit margins (25% for Amazon and 22% for Kroger). But that 21% difference in taxes makes it effectively impossible for Krogers to compete with Amazon.
Horwitz is wrong about Amazon doing great things in groceries. And Galloway is wrong about breaking Amazon up with anti-trust leading to improvements. We need to normalize the tax treatment instead. With a government granted 21% reduction in sales price no one will even try to compete with Amazon. Without competition Amazon will not bother making improvements. And if you break Amazon up but the babyzons sill have that 21% discount they will just regionalize and continue as local monopolies. Once again no improvement. But if you level the playing field and tax everyone the same then competition will resolve these issues on it's own.
Ben at May 10, 2018 9:37 AM
The market can solve many (not all) problems. In your typical grocery store now you can find diabetic, low-fat, and gluten-free foods. No one commanded that.
I keep hoping for a shelf or a section where the products have no sugar or corn syrup squeezin's. It's in everything.
Not talking about the diabetic shelf, but a whole area where regular products such as canned goods, sauces, etc. are prepared and sold with no sugar.
Kevin at May 10, 2018 9:41 AM
> I disagree
It's almost like you wanna prove you can do homework.
Crid at May 10, 2018 10:32 AM
Stores [in the 1970's] were generally small, not well lit, not always clean, limited in the variety of goods they stocked (especially fresh produce), and lacking in the prepared foods we take for granted at most grocery stores today.
As I remember it, the little corner stores weren't always clean and well lit, but the chain stores were. And while they weren't as big as the supermarkets today, they were plenty big enough to be well stocked with everything they carried.
Variety has certainly increased, but quality? It's been decades since I've seen USDA Prime meat at a supermarket; it used to be routinely available (granted, at a price I was never willing to pay).
(What I remember is from personal experience; I've been doing my own shopping since 1967.)
Rex Little at May 10, 2018 10:48 AM
If you wish to present an argument you can Crid. Instead you persist in this juvenile enemies list and repetitive pointless remarks.
By all means show me the error of my ways. But 'kissed a girl' doesn't cut it.
Ben at May 10, 2018 12:40 PM
Is this progress? That is debatable.
We also have more preservatives and unhealthy additives than we did before. And, as the author of this article unwittingly implies, there's more junk food than ever.
And the produce that he's lauding? Well, that's because we've discovered more ways to sacrifice quality for quantity. Bananas, for instance, are now harvested long before they've ripened, before they've absorbed all the nutrients they're supposed to from the plant they're prematurely plucked from.
They're actually almost as green as the leaves themselves. They, to ripen them, they're simply chambered with methane gas pumped in to induce a sort of "artificial ripeness."
Patrick at May 10, 2018 1:25 PM
The two companies have vastly different operating models and operating expenses. Kroger has to run brick and mortar stores with customer-facing employees. Amazon runs warehouses and its operations are mostly back office.
Despite those operating differences, the two companies are surprisingly close in net profit margin. Kroger has a net profit margin of 1.55%. Amazon is currently running at 1.71%. Amazon's vast size, reach, and product variety gives them the edge in raw profitability numbers.
Once Amazon figures out how to become the weekly go-to grocery store, the Krogers of the world will be in real trouble. They're already facing pressure from Walmart and Target, which can offer groceries at a lower price and make up the margin on dry goods (clothing, toys, etc.); and from Costco which can offer bulk discounts.
Walmart and Costco disrupted the shopping models in the '90s by turning the monthly mass merchandise and warehouse shop into a weekly shop, stealing shopping trips from grocery. Now, Amazon is poised to steal shoppers from all three.
Grocery is by now a dying industry; and not because of tax rates. Walmart and Target offer the convenience of consolidating shopping trips - e.g., parents can purchase t-shirts, book bags, school supplies, Halloween costumes, and the weekly groceries in one trip.
Grocery stores that stock more than the standard boxed or canned foods and/or offer services (Trader Joe's, Central Market, Whole Foods, Earthfare, etc.) may be able to hang on for a while on the frisson of offering something new and different, but the days of large chain grocery stores are numbered.
Conan the Grammarian at May 10, 2018 1:42 PM
I'm with you. And can we get something where the no-sugar-added products are not pumped full of artificial sweeteners instead of sugar?
I just want to find a yogurt that does not taste "dietetic" and is not packed with more sugar than a can of Coke.
Conan the Grammarian at May 10, 2018 1:50 PM
Conan my point was that the profitability of the two firms is more or less identical. But that doesn't mean the sales prices are identical. Amazon can offer the exact same product at a substantial discount and make the same profit as Kroger or any other traditional grocer. Amazon already is offering non-perishable foods (flour, sugar, mac'n'cheese) and they are already pulling those sales from Walmart and other retailers.
King Arthur Unbleached All-Purpose Flour 5lb bag
Amazon $3.48
Kroger $4.89
29% off at Amazon. Pretty close to that tax difference. You can look at a number of different products and you will see the same thing. I understand that the brick and mortar store costs more to operate but it doesn't cost that much more. Tax treatment is a huge part of this because there is such a huge difference.
The place chain groceries will survive is on fresh goods. Fruits, fresh vegetables, meats. People want to look before they buy for such items. And stores throw a lot of them away as spoiled goods.
Also, Target? Are you serious? I know they are doing better than last year. But the company has a lot of issues. Not only the bathroom politics but also their grocery efforts haven't done well. Walmart had a big effect but Target's me tooism didn't work out well for the company.
Ben at May 10, 2018 3:10 PM
Personal anecdote; but worthy nonetheless - I remember a couple of years back when I went to Phoenix, AZ, for the first time and thought - only in America! - when I went to the local shopping mall's food court and had fresh sushi!
Fresh sushi in the middle of the freaking desert!
Just how awesome is that?!
charles at May 10, 2018 5:25 PM
Yes, Ben, Target. I worked in grocery (the main office of a big chain) in the early '00s and, while Walmart was a major focus, Target's segue into grocery was also an area of concern. Walmart changed the behavior and Target's jumping on the bandwagon reinforced it.
With that shift, the traditional grocery store was no longer the only channel that came to mind for purchasing weekly groceries. That change had a negative effect on our sales.
Conan the Grammarian at May 10, 2018 6:24 PM
Have you looked at them since then Conan? It was later that they really flubbed the grocery business. Everything I've read and seen in real life says their fresh food section is more or less spoilage. In large part due to their insistence on selling fruit per unit instead of per pound as well as a trend to put it at the back of the store instead of the front like everyone else. Though their supply chain didn't help as well. They started off strong with the non-perishables, but flubbed that too around 2012. In 2015 they closed all their stores in Canada. Not for grocery reasons but just general poor management. And then in 2016 they dove into gender politics. That cost them dearly in the non-coastal US. They are starting to make a comeback. But after a decade of poor management I'm not that optimistic.
Walmart for comparison started strong in non-perishables but their fresh stuff was moldy junk. And they've slowly improved and upgraded year after year. Back in 2000 I wouldn't eat Walmart meat out of fear of food poisoning. Today they are the little different from any other store. They've done quite well and wiped out most low status grocers. But Target should just drop the grocery stuff.
Ben at May 10, 2018 7:59 PM
Well, Ben, it's less about Target's success in grocery than it is about the change in consumer attitude that was brought about by the entry of mass merchandisers into grocery.
That foray, successful or not, put new players in the grocery business and made consumers think beyond traditional grocery store when considering where to buy their weekly groceries.
And the invasion of the grocery channel brought other entrants into the grocery game, further squeezing traditional grocery players who were limited to traditional grocery offerings by their supply chain and store space.
Burgeoning purveyors of Home Meal Replacement also put the squeeze on traditional grocery as new players offered pre-prepared meals, both pre-cooked meals (e.g., Boston Market) and ones that needed only minimal effort to be ready to eat (e.g., Blue Apron or Papa Murphy's).
And yes, Ben, Target is a part of that. Even if their produce and meat are terrible, people will still shop there for cheaper boxed or canned foods - a box of Kraft Macaroni and Cheese is a box of Kraft Macaroni and Cheese - and then use the more-expensive traditional grocer to back fill the larder with what they did not or could not buy at Target.
Conan the Grammarian at May 10, 2018 9:16 PM
Target's boxed and canned foods aren't cheaper Conan. They are the same price or higher. As I said Target really flubbed things. They need to exit the grocery business entirely. Instead they are trying to move into specialty items. A lot of non-GMO and organic labeling. Another effort that looks doomed to failure.
Either way I still say that most of the benefit Amazon brings is the reduced taxes it pays. That is the main threat to local stores. A 5-10% price difference they can handle because the product is here. You can look at it and touch it. In some cases you can make sure it is the right size. But a 20-30% price difference is significant. It is hard to anyone to compete with that.
Ben at May 11, 2018 6:10 AM
Ben, you're fixating on Target as a sucky grocery store, whereas I'm focusing on consumer behavior overall. Enough items are cheaper at Target to change the shopping dynamic and to keep it changed.
When I was in grocery (corporate office), we used to swap pricing war stories. The HBA manager told us she would buy her contact solution from Target because it was cheaper than at our stores. And, once they added groceries, she said she frequently picked up some groceries on the same trip.
One trip was easier than two. So, even if the item is not cheaper than at a grocery store, the convenience of being able to consolidate trips is enough to compel a change in shopping habits. It was then, and it is now.
I was at a Target the other day and at least half the people checking out had items in their baskets they probably used to buy at least in part at grocery stores (food, candy, aspirin, toiletries), along with items traditionally purchased at mass merchandisers (sporting goods, toys).
And that's how the dynamic was changed - Walmart, and then Target, added groceries, changing what was a once-a-month shop at a mass merchandiser into a once-a-week shop.
And yes, Amazon does have tax advantages over local businesses in many states.
On the other hand, brick and mortar has an immediacy advantage, at least in fresh groceries; at least for now. To your point, however, Omaha Steaks has figured how to sell fresh meat online, Amazon will, too.
Grocery underwent a significant shift in the '30s and '40s when The Great A&P, drove mom-and-pop grocers out of business by inventing the supermarket, bypassing the wholesalers, and having larger stores with more inventory and pre-measured bulk items.
A&P was accused of having unfair advantages over the traditional mom-and-pop grocers. The FD Roosevelt Administration tried to put them out of business arguing consumers benefitted from higher prices, but failed.
Grocery underwent another major shift when mass merchandisers like Walmart and Target got into the arena.
And Amazon may cause yet another shift - I'm not sure if people are willing to purchase the bulk of their groceries online yet, but that day is probably coming. The question then becomes whether that shift was because of convenience or because Amazon could sell it cheaper due to tax disparities.
Debating taxes with the average American is an exercise in futility. I used to work with a guy who argued against a flat tax rate, holding that people should be taxed on their ability to pay (i.e., soak the rich). Later, he happily bragged that he bought his toiletries online and avoided state and local sales taxes that way. SMH.
Conan the Grammarian at May 11, 2018 10:15 AM
Why I certainly do not denounce grocers and large chains for making a business providing goods customers want, in some ways we have to look at the term "better" as being defined from different perspectives.
Food is much cheaper and available than it was in the 1970s as measured in constant dollars. However there is a price that is often worse than price.
Most of the food packaged today contains inordinate amounts of adulterants that are at least of questionable value and worst unhealthy. The relentless drive to lower the cost of goods sold leads to farming techniques that are both harmful to the environment but contribute to nutrient deprived and chemical poisoning, especially in the example of RoundUp which the Europeans consider a "probable carcinogen.".
Of course others are free to choose to shop the organic section of the store but we really need to concentrate on health over convenience.
As an example of a possible compromise I found an old box used for Swanson TV dinners from the 1970s. The ingredient list consisted of: Chicken Breast; Potatoes; Corn; Butter; Vegetable Oil; Salt; and Seasonings. Now, it reads like the chemical composition of a trash of a college chemistry lab. I fail to understand why we can't return to the former.
Darren Smith at May 11, 2018 11:02 AM
I fail to understand why we can't return to the former. Darren Smith
Lawsuits
Those old TV dinners would rot within a week, and people would get food poisoning because they failed to properly store and cook them.
Todays prepackeged meals often are sprayed with anitbiotics, anti fungals, and some are irradiated for good measure, and chalk full of preservatives that prevent them from rotting until a point that any jury would agree yes he was stupid to eat something that old.
These days I've got a freeze dryer that pulls less power than a refrigerator, so when stuff is is season I buy it at a local market, dry it, and package it for snacks thruought the year
lujlp at May 11, 2018 11:58 AM
I believe the ingredients disclosure requirements were somewhat looser in the '70s - thus the ingredients list would exclude all kinds of things in the food that, today, are required to be disclosed.
Conan the Grammarian at May 11, 2018 12:07 PM
"Enough items are cheaper at Target to change the shopping dynamic and to keep it changed."
Used to be. Enough items used to be cheaper at Target. They aren't anymore. 20 years ago you were correct. Things have changed yet again. Just like when Target and Walmart first got into groceries they took a loss on the food and made up for it elsewhere. That is no longer true for both stores. Walmart keeps their prices low by being big and getting volume discounts. Target isn't able to do that.
And the link for not collecting sales tax is pretty weak. Most places Amazon does collect and remit all local taxes. It is federal taxes where they get the biggest benefits.
I agree that most people don't think rationally about tax policy. Most people want someone else to pay for everything. And then they fail to realize when they are 'soaking the rich' that they are the 'rich' getting soaked. Politicians love high taxes and lots of targeted deductions. It gives them more direct power over people. But in the long run it is very corrosive to economic development and social stability. A simple low and easy to understand tax is very important for economic development. And in the same way simple rules for welfare are important for well administered welfare. Every time things get complicated they don't work out how most people want them to.
Ben at May 11, 2018 4:02 PM
Man, you're like a dog with a bone on this aren't you? I'm talking about how Walmart and Target created a sea change in consumer shopping habits and you're obsessing over the price of beans.
Well, you do have a point about Target's grocery business being in trouble. However, Target remains committed to the channel, having hired Kroger executives to "fix" the business. Grocery is important to Target. Traditional grocery categories are 22% of Target's overall business as of 2017, according to Forbes and Bloomberg. While flat in year-over-year sales, the categories making that segment up are still a significant part of the company's business, and that's business that they've taken away from traditional grocers.
The disruption caused by Walmart and Target was not just food items. The two largest mass retailers made serious inroads into several categories that used to be the near-exclusive purview of grocery stores - like toiletries, household cleaners, and paper products.
They did it not just with comparable, and sometimes better, pricing, but with convenience as well, letting consumers consolidate multiple shopping trips into one trip.
And, yes, things are still changing. More competitors have entered the arena once dominated by the Krogers and Safeways of the world - e.g, Lidl and Aldi - squeezing traditional grocers even more.
The intense competition for the grocery consumer has already put Albertson's and Safeway (now merged) on life support and has Kroger desperately searching for a merger, with Target if one rumor is to be believed.
Amazon's acquisition of Whole Foods is less a new combatant in the grocery battle and more a scrounger on the battlefield looting the dead bodies and knifing the wounded. Don't expect Amazon to dominate the channel for a while, yet. The combined Amazon/Whole Foods entity currently accounts for ≈2.5% of the market.
Conan the Grammarian at May 12, 2018 6:16 AM
I'll agree I am a dog with a bone about this. Because you kept making factually incorrect statements. I agree that Target was part of a wave of disruptions for traditional grocers. But that was 20 years ago. You kept talking like it was still happening today.
And I'll need some proof about Krogers desperately seeking a merger. Yes there was talk about a possible merger. But it looks like that was all speculation. I personally fail to see the value of a merger for both companies. But maybe I'm not seeing something.
I still say Target should get out of the food business. Keep the paper products you mention. But ditch the food. Especially the perishable food. That this is 22% of their business isn't a sign of Target doing well in groceries but more a sign of just how bad much of their business has gone of late. And for the love of god please get out of politics. But that is probably a vain hope as well.
I agree on the Amazon/Whole Foods stuff. They may become a major rival for Walmart and it's 14.4% of the grocery business. But it will take some time to do that. Maybe 10-20 years.
Ben at May 12, 2018 2:21 PM
So I asked my father about this Target stuff. And he sided with you Conan. He said I was muddle headed about the whole thing. They shouldn't change a thing about their grocery side. He then went on to tell me it was better than shopping at a gas station. . . . I'm not sure what to make of that.
My mother mentioned that after hurricane Harvey blew through Target was the only place you could get fresh fruit. Everyone else was sold out. Make of that what you will.
Ben at May 12, 2018 6:55 PM
No, Ben. My original comment said "in the '90s." It also said, "Walmart and Target offer the convenience of consolidating shopping trips," but you fixated on the price of flour between Target and Amazon and the price of groceries at Target.
And that disruption that happened "in the '90s" is still happening today. Go to a Target and watch. People are buying grocery items there (not just food) - sales that, absent Target's grocery business, would have gone to a Kroger or Safeway-Albertson's or Ahold-Delhaize. That people can go to another channel and buy the same items puts enormous pressure on grocery stores, which are the one-trick ponies of the retail world.
New entrants into the arena, like Lidl and Aldi, are only going to increase the pressure on the existing players.
Never said it was a sign Target was doing well in grocery. It is, however, a sign of how important the grocery business is to Target and why the company is unlikely to follow your unsolicited advice.
Perhaps, you're right and, like Sears, Target has gone a bridge too far, trying to compete in too many arenas. But grocery is a product mix that is here to stay at Target, at least in the intermediate term.
Once Amazon started selling the same products that mass merchandisers sold, the major players in the mass channel, Walmart and Target, needed an additional draw to get people in the door. Grocery was, and still is, that draw, even if it's only a draw for convenience and not price or quality.
I'd agree that most of the Target-Kroger merger rumor was based on a misreading of a meeting the two companies had to discuss expanding Kroger's use of Target's newly-acquired Shipt food delivery service, but a joining of the two makes some sense, even if it's only a strategic partnership in Shipt.
And, yes, Kroger is looking for a partner to give it greater scale, just not a traditional brick-and-mortar partner.
I wouldn't say you're muddle-headed, just fixated on the minor points and missing the major point. It's not whether Target is doing well in grocery, it's that Target is in grocery at all.
And I am also not sure what to make of your father shopping for groceries at a gas station.
The large grocery chain I was with in the '00s started opening fuel stations on the pad - a move which led to my gaining a fantastic amount of insight into fuel operations and what goes into getting gasoline to market; and why gasoline is so bloody expensive in California.
Conan the Grammarian at May 13, 2018 8:21 AM
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