Rabbitman and the Perilous Life of Grocery Managers

Many of my days are spent playing Tetris with skids of stock; shuffling things around to try and make more room in the back or gain access to the walk-in freezer and dairy cooler before the refrigerator truck shows up with 5 skids of sour cream, meat and frozen baked goods (sometimes all mixed together on the same skid just for added fun and challenge!).

There are other perils to the job though besides deadly games of Tetris. The retail food industry has shifted somewhat. 20 years ago, grocery stores made good money and could afford to pay quite well (midnight stock crew were getting paid almost as much as I’m getting paid now). Now all the money is made by the corporations and the stores are being squeezed.

Sobey’s or Zehr’s of course owns the stores and takes their cut of sales.

But they also make money running the warehouse and acting as the distributor to those stores.

For the store brand products they also make money off of the manufacture and sale of the Compliments or President’s Choice products to the warehouse. Which is why they push the store brands. Even though they’re cheaper, they make money on them at every stop along the supply chain from manufacturing, to wholesaling to retail sale.

Plus when things go on sale in the flyer they will just allocate so many cases to you based upon ‘sales history’ (or what they’d like the sales history to be). You can try and cancel allocations but the stuff will show up anyway, because they want to sell it to the store. They don’t really care if the store can’t unload the product; they’ve already made money on it wholesaling it to the stores. The other week a particular slow-moving brand of cereal was going on sale and I thought "Great! Now I can clear it out." Nope. Three more cases show up on the next truck.

It’s a bit like if the Mafia were running things. I’ve got a case of cookies you can’t refuse….

Also everything on the front and back page of your weekly sales flyer, plus basics like milk and eggs are being sold at a loss to get you in the door. In a town like mine with three big grocery stores plus ours, plus Shopper’s Drug and Giant Tiger selling groceries, folks can just live off the front and back page sales. Shopper’s Drug and Giant Tiger and Wal-Mart sell all of their groceries at a loss, in the hopes that while you are there, they will make their money off of selling you some clothes or cosmetics or electronics which they are retailing at a 400% margin (so even during a 50% off sale, they’re still making some money).

The Boss informed me the other day that we lost $45,000 last year on milk, selling it below cost.

$45,000!

If we could just sell it at cost I could be paid $20 an hour!

If we made a small margin on it we could maybe afford to get that fourth compressor the refrigeration system needs so it doesn’t break down in the summer during ice cream sales.

I remember back when I ran a book store and the articles in Quill & Quire or the Canadian Booksellers Monthly moaning about only making 40% margin. If I got 40% on everything in the Buy Food I’d be hailed as a God among Grocery Managers. I’d be paraded around Head Office in a golden palanquin and offered my choice of nubile administrative assistants to be my concubines.

As it is, anything over 20% is pretty good.

Fortunately, no one has yet figured out a way to digitize groceries for free download or move the retail operation to China. And people will always have to eat.

Otherwise I usually like my job, although the teenaged stock boys can be infuriating at times.