Apparently the grocery industry has no clue as to what it’s doing:
The dollar stores, with their smaller scale and selection, don’t need to pay as many workers as grocery stores, and they can focus on the high-margin packaged products, which happen to be the unhealthy ones.
That’s the journalist at Slate and obviously they’re correct because, well, they’re a journalist at Slate, right?
Here’s how the grocery industry gets it entirely wrong:
Grocery sales 55% is the highest amount of sales in a retail store format. The gross margin in grocery is typically 25% for dry grocery; 30% for grocery frozen food and 30% for grocery dairy.
Produce sales typically account for 10% of the total store sales with a 40-45% gross margin.
Meat sales typically account for 9% of the total store sales with a 28-30% gross margin.
Deli sales typically account for 5% of the total store sales with a 40% gross margin.
Bakery sales typically account for 2-4% of the total store sales with a 55% gross margin.
All in all, the more a store sells in these fresh departments, the more profit it will put on the bottom line.
How joyous, an entire industry corrected by the single journalist!