Thursday, August 9, 2012

Supermarkets Really In The "Distribution Business"

"For every dollar we spend on food, only about 16 cents goes to the farmer. The other 84 cents go towards what economists call 'marketing,' which refers not to commercials and advertising, but the entire chain that ensures food makes it from farm to plate," begins THIS CNN article.

"Today, nearly all our meals arrive in our neighborhoods via supermarkets (or supercenters, the term for operations like Walmart and Target that also sell groceries). Those two kinds of stores sell about 80 percent of our food. Walmart, the biggest supermarket in the country, sells roughly one-quarter of the food bought in the U.S., making it the largest grocer in our history (and that of the world)."

 “'The misconception is that we're in the retail business,' Jay Fitzsimmons, a senior vice president and treasurer for Walmart, told investors in 2003. But in reality, 'We're in the distribution business.'”

No comments:

Post a Comment