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> When it was no longer enforced, the big chains used their market power to extract special deals from suppliers, and thus Sentences like this make me realize

> When it was no longer enforced, the big chains used their market power to extract special deals from suppliers, and thus Sentences like this make me realize nobody writing about these problems has any actual experience in the grocery industry. Grocery store margins are insanely thin. The relationship you have is backwards - suppliers and distributors have insane leverage over grocery stores. Massive brands essentially lease the aisle space from the stores. And stores have to stock the products consumers want because if they can't find the soda they like, they might never shop at that store again. The only leverage grocery stores offer is volume pricing. Frito Lay would much rather move a truckload of product a day through a Safeway than drive around and stock tiny bodegas.

lapcat 2y ago
> suppliers and distributors have insane leverage over grocery stores. > The only leverage grocery stores offer is volume pricing. This is directly contradicted by the article: "Congressional hearings and a federal investigation found that A&P possessed an advantage that had nothing to do with greater efficiency, better service, or other legitimate ways of competing. Instead, A&P used its sheer size to pressure suppliers into giving it preferential treatment over smaller retailers. Fearful of losing their biggest customer, food manufacturers had no choice but to sell to A&P at substantially lower prices than they charged independent grocers—allowing A&P to further entrench its dominance." "That move tipped the retail market in favor of the largest chains, who could once again wield their leverage over suppliers, just as A&P had done in the 1930s. Walmart was the first to fully grasp the implications of the new legal terrain. It soon became notorious for aggressively strong-arming suppliers, a strategy that fueled its rapid expansion."
- legitster 2y ago
  Yeah, I am saying this author does sound like they have any grocery experience or talked to anyone who does. The A&P case was from the 1930s. It goes without saying that the grocery industry is a lot different today than it was. Robinson-Patman was a pretty obscure law, and it probably wouldn't have had much effect either way on preventing the rise of the supermarket chains despite much of the conjecture in this article.
  - em-bee 2y ago
    i am skeptical. in germany, big supermarket chains squeezing suppliers is still a problem today. i see no reason why this should be any different in the US.
    - legitster 2y ago
      It depends on the chain. Aldi's, Trader Joe's exclusively use white label brands, so they have complete control of their suppliers. Walmart and Costco are big enough to have their own logistics. But for most other supermarket chains, it's the suppliers that dictate the price. The stores essentially lease out their shelves directly to the distributors or manufacturers.

lapcat 2y ago

> suppliers and distributors have insane leverage over grocery stores. > The only leverage grocery stores offer is volume pricing. This is directly contradicted by the article: "Congressional hearings and a federal investigation found that A&P possessed an advantage that had nothing to do with greater efficiency, better service, or other legitimate ways of competing. Instead, A&P used its sheer size to pressure suppliers into giving it preferential treatment over smaller retailers. Fearful of losing their biggest customer, food manufacturers had no choice but to sell to A&P at substantially lower prices than they charged independent grocers—allowing A&P to further entrench its dominance." "That move tipped the retail market in favor of the largest chains, who could once again wield their leverage over suppliers, just as A&P had done in the 1930s. Walmart was the first to fully grasp the implications of the new legal terrain. It soon became notorious for aggressively strong-arming suppliers, a strategy that fueled its rapid expansion."

legitster 2y ago
Yeah, I am saying this author does sound like they have any grocery experience or talked to anyone who does. The A&P case was from the 1930s. It goes without saying that the grocery industry is a lot different today than it was. Robinson-Patman was a pretty obscure law, and it probably wouldn't have had much effect either way on preventing the rise of the supermarket chains despite much of the conjecture in this article.
- em-bee 2y ago
  i am skeptical. in germany, big supermarket chains squeezing suppliers is still a problem today. i see no reason why this should be any different in the US.
  - legitster 2y ago
    It depends on the chain. Aldi's, Trader Joe's exclusively use white label brands, so they have complete control of their suppliers. Walmart and Costco are big enough to have their own logistics. But for most other supermarket chains, it's the suppliers that dictate the price. The stores essentially lease out their shelves directly to the distributors or manufacturers.