This could happen in theory, yeah, but in reality (especially in America) I think there's zero chance of that happening at meaningful levels
The audience who buys high-margin grocery items is almost entirely separate from the audience who would even semi-regularly eat at a community kitchen.
This is something I've been thinking about a lot recently. It seems to be an impossible task to build a startup in this area as most supermarkets are far too large and have their own (seemingly sloppy) teams to do this stuff. Experience has taught me that there's probably a reason for things being the way they are.
You could drive all over town buying groceries piecemeal at whatever store has the biggest loss leader deal on those particular items, but for a loaf of bread and a gallon of milk and a dozen eggs the savings will be offset by the expense of going to multiple stores. Yet if you are buying 10,000 gallons of milk and 10,000 loaves of bread, it becomes feasible.
The grocery business has brutally low margins (~1%). Bezos famously said "your margin is my opportunity", but there's no margin == no opportunity... at least as far as the traditional grocery business goes.
There's some far deeper strategy going on here, lots of possibilities.
Grocery stores are already operating at rock bottom – in most markets, at least.
It is not that difficult to try opening your own grocery store. In fact, many restaurants did exactly that during COVID-19 shutdowns. Realistically, succeeding is going to be nigh impossible, though, as there is not much you can compete on. You are not going to be able to sell the product for less.
It is not meaningfully bound by a regulatory barrier, but it is limited by there being no further room for competitiveness, as also spoken to in the previous comment.
I think the 1.5% margins would be a problem though. Plus I image the big supermarket chains have the benefit of large economies of scale taht the small individual stores don't have.
Grocery chains are notoriously low-margin businesses though. Maybe a few places are able to gouge, but as a whole, they cannot and still be low-margin as an industry.
Literally no possible way Austrian grocery stores are pulling in 43% margins. That's more than Apple makes. I can't tell if this price fixing talk is the product of overactive imaginations or a gigantic lack of imagination.
If grocery stores were suddenly capable of 43 percent margins there would be absolute pandemonium in the markets and stocks would skyrocket. Retailers in every industry would be switching to food sales en masse. People would be flying food in by aircraft. You see just the opposite. Food retailers' stocks are down a lot year-to-date.
The grocery business is extremely low margin. The independent grocer is increasingly being squeezed. There really is no way for an independent operator in this space to compete head-to-head on price or selection. If the local market allows they can go niche, or high-end and increase prices further while offering better product/ better customer experience, but most markets won’t support such a store.
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