Grocery Store Guru

All about the grocery industry, from a store level perspective.

I want Bakery products that aren’t frozen!

As more and more bakery products move to a thaw and serve format, many customers want products that they consider “fresh”.

My first reaction is always “Why?”

If you take something frozen home, you control the “best before” date. You can thaw the items one at a time, to make the package last as long as possible and ensuring you don’t throw away moldy baked goods. If you get home and realize you already had a package of whatever it was you bought, you can keep it in the freezer so the whole package doesn’t spoil. Heck, even if you thaw the whole thing right away, you are getting the longest possible time between thaw and spoil – there’s no time lost to sitting on the bakery department shelves, waiting to be bought.

Still, there are customers out there that want the “fresh” product. Sometimes it’s for convenience, and I get that. But for many people, there’s some idea in their heads that fresh bread is better, or a higher quality product.

I hate to tell this to those people – most stores are doing exactly what you would do with your frozen baguette. I can’t even think of a conventional grocery store that’s making their own baguettes from scratch anymore. The baguettes come in either par-baked (so the store can put the frozen baguette in the store’s oven, to finish them off) or fully baked (so the store can let the frozen baguette thaw and sell it as fresh). Both the stores and the companies that make the bread know that some people want fresh product, so they don’t advertise the fact, either. Because there’s no food safety danger when re-freezing bread (or even thawing it and re-freezing it several times), there’s no packaging standard that demands labeling for previously frozen bakery products.

A short and really incomplete list of store brand products I haven’t seen baked in a conventional grocery store for at least 10 years, not including bread:

  • tea biscuits
  • scones
  • cookies
  • muffins
  • brownies
  • danishes

These days, the only place you’re guaranteed to get a fresh bakery product is an actual bakery.

My advice – don’t let a “fresh vs. frozen” debate sway your buying decision… leave that to the final product. The technology required to properly freeze food has been around for a while, and there’s not really a difference between properly frozen food and fresh.

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February 19, 2012 Posted by | Products | Leave a comment

Why is There Always a Line at the Cash Registers?

This question is usually what I hear right after “I couldn’t find anyone to help me in the aisle I was in”.

Hate to tell you this, Mr. or Mrs. Consumer, but you take part of the blame for this one. Okay, a very small part.

There are 2 key facts at play here.

First, it’s a basic truth in almost any business that the largest controllable expense (I.e. not a fixed expense, like rent) is labour. It costs an awful lot to have an employee, and it’s not just the cost of whatever their hourly rate happens to be. Each employee costs the employer in CPP contributions,  EI premiums, WSIB premiums, and so on (PS I’m in Ontario, Canada… these are the payroll taxes we pay, but no matter where you are the employers are paying some sort of taxes and premiums…). Walmart had a chart in their lunch rooms that laid it out bit by bit – you may think you’re making $10 an hour Mr. or Mrs. Employee, but we actually pay out over $14 an hour to have you here! Aren’t  you lucky?.

Second, is that grocery retail (and retailers in general) have trained their customers to make buying decisions based almost solely on price. They use loss leaders on the front page of the flyer, use numbers the size of my hand to show you the amazing price… and we fall all over ourselves to buy whatever happens to be on that front page. I bet every one of us could walk into our kitchen or pantry and pick up something that’s been there for months, that we bought only because it was on sale for a great price…. how do you use Navel Beef, anyhow?

Your friendly local grocer knows that he’s going to lose a ton of money on those loss leaders. To make up for the loss, he’s going to have to spend less money this week… and the only really large chunk of change he can control is wages. The end result is that there are less employees in the store, trying to service an increased number of customers falling over themselves to buy what’s on sale.

How do they get away with it? Well, Mr. and Mrs. Consumer, you’re a predictable lot. You get very annoyed when you’re standing in a long line at the registers, with a buggy full of the $1.99 cases of bottled water and nothing else. In fact, some of you may even get angry and ask to see the manager (please don’t take it out on the frazzled cashier – they’re making minimum wage for the most part, and dealing with angry people for an entire shift does not make for a good day to begin with). I’d come over, listen to the angry rant, apologize…. but I can’t change anything about the situation. I’m sorry Ma’am, all of our cashiers are already working a cash. Some people would even tell me they’re never coming back! They can’t believe the terrible service!

Here’s the important part:

I would always see those same people back next week, cart full of whatever’s on special. Never fails. Doesn’t matter how many people get angry, shake their fists, yell and scream…. the next flyer, the store is full again. Today’s customers are so price focussed they’ll put up with almost anything to save the extra buck. The stores know this, and the cycle continues. Cheap prices, no staff.

Now, don’t get me wrong… this is no lament for the poor grocery corporations. They’ve done it to themselves, deciding that they’re going to compete on price alone (with a couple of very notable exceptions). Think about it… these are multi million dollar corporations, and they don’t do something that almost every other corporation does – advertise. All they do is send you a flyer every week telling you about their great prices.

One major exception is Loblaws…. but what do they advertise? Almost exclusively PC products. And if you have read my (very first) post about store brands, you’ll understand why. The other big exception to the price focussed major grocers is Longo’s. They’re only around the GTA/Golden Horseshoe here in Ontario, and they avoid most of the price mud-slinging… for those of you who don’t know, I consider Longo’s to be the best run grocery company in Ontario, by the way.

I’ll close this out with a quick story. A while ago, I was the assistant store manager of a grocery store in Toronto’s west end. It was a store of the discount variety and awfully green looking. Anyways, we had Nestle bottled water on sale for $1.99 2 weeks in a row. It was a loss leader – each one cost us $2.83 to bring in. We sold 12 TRUCKLOADS of water each week… each truck was 24 pallets of 84 cases of water (you can do the math, it still hurts my head). The store was insanely busy – constant lines at the registers, what staff we did have were re-filling the water display almost constantly. You couldn’t move in the aisles for all of the people shopping. Volume and sales were through the roof. These 2 weeks ended up being the highest sales weeks for the store in calendar year 2010.

Both weeks, the store lost money.

Brent

January 19, 2012 Posted by | At the Store | Leave a comment

Store Brand Products and Why I Buy Them

Store brand products (also known as Private Label) is the ultimate trade off between consumer and retailer. The consumer gets a product that’s usually comparable to the national brand for less money, and the retailer makes more profit.

Wait. More profit?

When you look at pretty much any section in the grocery aisles, the profit margin is ALWAYS highest on the store brand products that you see – even though it’s likely the cheapest thing on the shelf. That’s why the grocery retailers push their own brands so hard. They’re usually heavily featured in the inside pages of the flyer (after all of the loss leaders). You can be guaranteed that when you visit the store, you will find off-shelf displays of  private label products. Next time you’re in whichever store you choose to shop at, count how many store brand products are on the end-cap displays at the ends of the aisles. You’ll be amazed.

Believe it or not, the fact that the retailer makes more money on the stuff is one really big reason that I am willing to try the store brand version of pretty much anything. The retailer has a vested interest in getting you to switch to their store brand, and they look after the quality of their store brand products. Most now come with a 100% satisfaction guarantee to back it up, too.

Still, many customers question the quality of the store brand. If it’s a decent product, why is it so cheap?

The answer lies in the cost to bring a product to the market. Companies spend millions of dollars an advertising, just to get you to pick up their products. Someone has to sell this product to the grocery chains, or to distributors. Package designs are heavily researched and test marketed… the list goes on and on. These costs are factored in to the price you pay at the register for any national brand product.

Private label products eliminate almost all of the marketing costs associated with a product. These cost savings are then passed on to the consumer through a reduced retail.

Pop is a great example of branding and marketing. In most markets in north america, Coca Cola is the number one pop brand. Pepsi is usually in second place – although in some markets during the ’90’s, Pepsi was number three! So who is the huge company that is number three in north america, and was number two in a few markets during the ’90’s ?

Cott Beverages. Ever hear of them? Probably not… you’d have to search pretty hard to find any pop bottle with their company name on it. But Cott produces most of the store brand pop in the market, and it’s all a heck of a lot cheaper than Coke or Pepsi. Makes a big difference when you aren’t spending the millions of dollars on commercials and the like.

That also ties into another reason that I like to give store brand products a chance. There’s lots of smaller food manufacturers out there that aren’t interested in spending all of those marketing dollars. They would rather put their time, effort and dollars into making high quality, great tasting foods. Many of these companies go the private label route, selling their products to retailers rather than to the general public.

A great example of this is Belmont Meat Products. They make some of the best hamburgers I’ve ever tasted… but you won’t be able to find them without help! It’s not that they’re not readily available, they’re just not usually labeled with the name Belmont. But if you’ve eaten a few different varieties of hamburger that M&M Meat Shops has to offer, chances are you’ve had a burger made by Belmont.

I hope I’ve convinced some of you to try the store brand… it’s terrific when you find a product you really like and costs you significantly less. And if you don’t like it, you have a 100% satisfaction guarantee to fall back on. Either way, you have nothing to lose.

October 20, 2011 Posted by | Products | 1 Comment