Josh Elledge - Chief Executive Angel
Myth: Paper bags are better for the environment than plastic.
While the regular use (more than 26 uses) of reusable bags are best for the environment, plastic bags are 100% recyclable – just as paper bags are. The bigger difference in environmental impact, however, is production. According to EPA reports cited by the Plastics Industry Trade Association, “For all environmental impacts related to air emissions,water emissions and solid waste ““ those of paper bags are significantly greater than that of plastic grocery bags.”
“¢ Plastic bags use 40% less energy to produce and generate 80% less solid waste than paper.
“¢ Paper bag production generates 70% more emissions, and 50 times more water pollutants than plastic bags.
“¢ Even paper bags made from 100% recycled fiber use more fossil fuels than plastic bags
Myth: Grocery stores make only a percent or two profit on products sold.
Fact: Average profits for the food retail industry are generally below 2% after taxes according to the Food Marketing Institute. Some popular retailers, however, reportedly earn 5% to 6% in net profit which is pretty healthy given the total volume of sales. Advertising, labor, operations, and inventory are among the many expenses involved in running a successful supermarket chain. Lots of products can carry a very small profit margin for the retailer. Losing money on certain products to drive traffic through the front door is also commonplace.
The fact is, however, there are many products which bring huge profits for grocery chains. Some store-prepared foods in the deli, bakery, and produce department can bring in margins of close to 100%. Your store's meat department and other non-prepared produce items can fetch profits of more than 50%. These product lines are popular and are commonly part of the “˜profitable perimeter' in most stores.
It may surprise you to learn that cereal can generate profits of 40% or more. Finally, as you would expect, any impulse purchase in the checkout will bring ear-to-ear grins among store owners. Magazines, candy, toys, batteries, and individual drinks can fetch profit margins north of 70%. Be very careful about dollars spent to appease your curiosity, munchies, or child's insistence for a treat while loading the conveyor belt.
Myth: Products that are more popular get more shelf space.
Fact: Not necessarily. It's a fierce war for shelf space with regular negotiations between manufacturers and retailers for a limited number of inches. More “˜facings' for a product equal more sales. A small percentage increase in sales can mean millions of dollars in sales for a large manufacturer. Items stocked between waist and shoulder level and those displayed on the ends of aisles or within special displays can sell dramatically more. Retailers know this and often charge a luxury tax to the manufacturer for the shelf space known in the industry as a slotting fee. The slotting fee system is a practice seldom talked about beyond retailers' sales negotiation meetings.
Slotting fees vary greatly depending on the product, manufacturer, and market conditions. For a new product, the initial slotting fee may be as high as $250,000 in high-demand markets in addition to any promotional, advertising and stocking fees. According to an FTC study, the practice is “widespread” in the supermarket industry. Many grocers can earn more profit from agreeing to carry a manufacturer's product than they do from actually selling the product to retail consumers.
Myth: You can tell how fresh a loaf of bread is by the color of the twist tie or plastic tag
Fact: I saw this one posted on our facebook wall some time back and it turns out this is actually true. A different color tab or tie is often used each day of the week signaling to the stocker which product to remove or rotate to the front each day. Knowing this code can, in fact, ensure you're getting a fresh loaf.
Before you get too excited, each bread company can have their own code regarding days of the week and it's designated color. You'll need to contact your favorite bread company – or talk to your grocer to find out the color code. Here's the bigger reason not to spend too much time studying up on this: bread is not commonly kept on the shelf more than a couple days. It's a very fast circulating product line and chances are very good, you're getting an extremely fresh loaf when you buy from your favorite retailer.
For kicks, see if your favorite brand stamps a “best if used by” date on the tag. Some brands do – which negates the need to know the secret code. One thing to look out for: In the rare case you see three different colors of tags on a specific brand, you might want to look closely at the quality. This means you have a 3 to 4 day span of deliveries still on the shelf – hardly worth getting worked up over – but still nice to know.
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