# Food musings



## chefross (May 5, 2010)

So, as you may know I'm a produce manager in a small rural grocery. With 46 years of cooking and being a Chef I can't help myself sometimes.

For instance, the other day I got in 25 Lbs. of Brussel Sprouts. I could immediately tell they were harvested from the bottom of the plant making them "mini" cabbages. They had a lot of leaves and stem still on them.
I decided to make a chart of how much waste I got when I cleaned them. 
I tray my veggies, then wrap them in plastic, and weigh them. I cost most items 40% markup to cover the overhead, the tray, plastic, labor etc...
I went through the 25# in 3 days. I got 2 .5# of waste at $1.72 cost per pound. Retail is $2.89 a pound. Anyway, doing all the math, at the end, we made approximately $4.40 profit on that 25# box of product. 
Markup in grocery stores is as small as a restaurants margins. Food for thought.


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## Seoul Food (Sep 17, 2018)

chefross said:


> Markup in grocery stores is as small as a restaurants margins. Food for thought.


Tell that to places like Wegmans and Whole foods lol. But yes, I would agree in a place like where you work the profit margin may not be as big, especially with fresh produce. It's hard enough to get people to buy fresh ingredients instead of frozen and charging an arm and a leg for it won't help. Some profit is better than none if you have to throw it away in the end.


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## Iceman (Jan 4, 2011)




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## Aldente (Apr 26, 2012)

Seoul Food said:


> Tell that to places like Wegmans and Whole foods lol.


I don't know Wegmans, but Whole Foods, if you notice, has a huge area where they sell prepared foods. Essentially, it is a buffet. It's like a restaurant in the store. These are unbelievably marked up and I am sure they must make tons of profit there. (Yes, I am also sure they have quite a bit of waste as well)

Also, their prices for the grocery items are all marked way up. The milk, for example, is a minimum $1 higher than any grocery store.

Whole Foods sells an image. They attract a certain clientele that want to feel spoiled and are willing to pay for it. (I do like their Parmigiano Reggiano. It's really good).

I don't know the numbers, but I am sure Whole Foods has a healthy profit margin.


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## Seoul Food (Sep 17, 2018)

Aldente said:


> I don't know Wegmans, but Whole Foods, if you notice, has a huge area where they sell prepared foods. Essentially, it is a buffet. It's like a restaurant in the store. These are unbelievably marked up and I am sure they must make tons of profit there. (Yes, I am also sure they have quite a bit of waste as well)
> 
> Also, their prices for the grocery items are all marked way up. The milk, for example, is a minimum $1 higher than any grocery store.
> 
> ...


They are a giant grocery chain here up on the upper east coast. They have been slowly adding a lot of their own brand items or prepared items in a grab and go style for years now. Something may seem cheap but then you find out the price per pound of the prepared items are like $20+ a pound.


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## Iceman (Jan 4, 2011)




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## Iceman (Jan 4, 2011)




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## L'uovo vulcanico (Nov 9, 2020)

Aldente said:


> I don't know Wegmans, but Whole Foods, if you notice, has a huge area where they sell prepared foods. Essentially, it is a buffet. It's like a restaurant in the store. These are unbelievably marked up and I am sure they must make tons of profit there. (Yes, I am also sure they have quite a bit of waste as well)
> 
> Also, their prices for the grocery items are all marked way up. The milk, for example, is a minimum $1 higher than any grocery store.
> 
> ...


They're huge out here on the left, er, west coast as well... they earned their nickname "Whole Paycheck Foods"... We used to live in Berkeley, then Oakalnd, and I still know people who use shopping there as a status symbol brag, when there are a lot of places locally that are as good or better...

Speaking of Berkeley - we had 2 local stores, one a small, local chain (Andronicos) that were somewhat pricey, but had very good quality... They also had a "deli section" that was really good, as well as a staff of meatcutters on call and would custom cut whatever you wanted if they didn't have it. Unfortunately they went belly-up, but they were usually always good. (I understand Safeway/Vons bought out the name and are bringing it back in some of their stores...).

The other one was "Berkeley Bowl", which I likened to a "combat shopping arena" - high prices, narrow aisles, so-so produce, and literally EVERYONE who shopped there was angry, uptight, and overly entitled... people would ram you with their shopping carts if you were in their way, shove you aside to stand in front of you, etc... The only way to survive was to squint your eyes, wear a psycho grin, and mumble to yourself just loud enough to keep people away... The only reason to go was they had a HUGE and DEEP selection of everything.

Ahhhh.... the good old days!


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## Iceman (Jan 4, 2011)




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## JohnDB (10 mo ago)

chefross said:


> So, as you may know I'm a produce manager in a small rural grocery. With 46 years of cooking and being a Chef I can't help myself sometimes.
> 
> For instance, the other day I got in 25 Lbs. of Brussel Sprouts. I could immediately tell they were harvested from the bottom of the plant making them "mini" cabbages. They had a lot of leaves and stem still on them.
> I decided to make a chart of how much waste I got when I cleaned them.
> ...


I hate to say it but that's exactly what I've seen everywhere. That's the business model that's supposed to happen.

Grocery stores profit is not from selling groceries. It's a real estate business and they really don't care about groceries except that it brings the foot traffic.

Those shelves in your store are rented by the foot. (Only to those vendors who sell sufficiently) The little doctors clinic or bank are paying a premium in rent. The shops next to the grocery store pay the highest rent for commercial space. The actual sales of food is a break even business...but the real estate market is where the real money is made.

Everyone has to eat...everyone needs groceries of some sort...toothpaste, hairbrush, bar of soap....all come from the grocery store. The foot traffic counts and street traffic counts are watched very very closely because that's what the rent they charge per square foot is based upon. And they have to pay premium for that space.

You get the job and work....the building owners get the money.


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## myklbykl (9 mo ago)

I try to shop at smaller stores and stores that support local farmers and organically grown produce. I don't mind spending more for good produce at a high-end store like Met Market in Washington, but it irks me that everything is marked up so much, so a can of beans costs $2 more than at Safeway. I wish there were more farmer's markets where I live, but we do have a few good ones, and I'm looking forward to summer. When I was in CA there was a fantastic farmer's market just a few blocks from our house. But now the sun has incinerated the state and we had to flee north.


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## leeniek (Aug 21, 2009)

I work in QA for a grocery store chain here and I can tell you all that the prepared foods are a huge draw for people to shop at the store for sure. Our claim is that we do not use any additives or preservatives and our food is like home cooking and our sausages that we make in the meat plant are the same recipe that the founder used to make 60 years ago for his family.
I am honest at work about where I shop.... I get most of my meat and produce from the local farmer's market and if I need to get meat or produce from a grocery store I will go to one of our stores. I always do buy our sausages as I know what goes into them and I know how they are made.
There is Whole Foods here but it is over an hour from where I live so I have never been there...


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## JohnDB (10 mo ago)

Total cost is roughly $21.50 in ingredients 

I'm going to have to figure something out to get it lower.


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## chrislehrer (Oct 9, 2008)

So I sometimes hang out for beer with the head butcher at a local Whole Foods. This is greater Boston area, but I suspect that something similar occurs wherever you are, if that's US.

Basically they treat most meat as loss leader. Because of who the clientele are, they make the real money on "exotic" produce and especially premade foods marketed as healthy and if possible low calorie. Lunchtime buffet makes a killing. 

In short, the business model is to get 25-60 yo women to buy lunch, snacks, produce, and impulse purchases, having first tempted them into the store with good quality meats at good prices -- and they'll tell themselves they're not wasting money or health because of the meat prices and the other (expensive) things they buy.

Seafood is 50/50 like this, but it is commonly thought of as intrinsically healthy. Obviously the dry aged steaks and things like that aren't going to be cheap. But if you only buy chicken, pork, and basic beef cuts from Whole Foods you can get good products for the best prices around.

I have checked: locally at least, this is in fact true, apart from a few things that are cheaper from the Brazilian butchers at good quality.

Something to consider.


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## JohnDB (10 mo ago)

chrislehrer said:


> So I sometimes hang out for beer with the head butcher at a local Whole Foods. This is greater Boston area, but I suspect that something similar occurs wherever you are, if that's US.
> 
> Basically they treat most meat as loss leader. Because of who the clientele are, they make the real money on "exotic" produce and especially premade foods marketed as healthy and if possible low calorie. Lunchtime buffet makes a killing.
> 
> ...


Grocery stores work on a completely different business model. They are more an exercise in real estate than selling groceries. From shelf space rented to companies like general mills, Nabisco, Nestlé, and Frito Lay to the small stores surrounding the grocery store. The grocery sales are just supposed to make a small profit and pay labor....the real profits come from the leases and dollars/square foot sales used for calculating rent. 

Grocery stores like whole foods, Albertsons, Kroger and PX (military bases) really care about sales regardless of margins. Of course they want profits....but the margins are very small by comparison of what other retailers will mark up their products....especially foodservice. 

Even the weekly advertising in the newspaper is paid for by the various companies, not the grocery store...and that too produces a profit for the grocery store. 
Grocery stores make a profit off of everything except groceries. Kinda nuts system but it's been working for them for years.


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## leeniek (Aug 21, 2009)

It is amazing how much money suppliers spend on getting their products into the grocery stores. 
I work for a grocery store chain and the suppliers send us cases of samples in the hope that we will find them acceptable to our business model and carry their products in our stores.


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## chefross (May 5, 2010)

leeniek said:


> It is amazing how much money suppliers spend on getting their products into the grocery stores.
> I work for a grocery store chain and the suppliers send us cases of samples in the hope that we will find them acceptable to our business model and carry their products in our stores.


A few months back corporate wanted our store to carry a certain product that needed to be reheated and portioned then sold by weight. We could not get our public to embrace that new product and we lost almost $800.00 the first month.
We have since abandoned that but some of corporates other ideas took off.


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## Iceman (Jan 4, 2011)




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## JohnDB (10 mo ago)

Been pondering a question in Mt head this past couple of weeks. 

Is it better to modify portions to fit a price point or just better to modify prices to reflect a better food cost. 
Of course in a bakery it all has to fit packaging or else it will never leave the store...I was thinking about selling a pull apart bread/coffee cake type thing for the many offices in my neighborhood. (They do well) 
And I was thinking about my breakfast sandwich. An extra ounce of sausage makes it better...heartier. but is it too much?

Choices choices choices.....


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