[notyourday]

> . One would expect the flour not being shipped to the restaurants would be redirected into the retail supply chain but that doesn't appear to be the case.

So I have friends that are reasonably known restaurateurs who obviously shut down their restaurants. I was talking to them about the logistics and the issues with the supply chain. It was rather eye opening to me.

TL;DR : the problem with the supply chain is that the restaurants pay more for ingredients wholesale than what the public is willing to pay retail.

We do not have a product shortages -- we have excessive amount of perishable product that was offloaded at excessive markup to restaurants/cafeterias/schools/etc. I'm in NYC - I can still walk into a regular grocery store in Queens/Brooklyn ( non Whole Foods ) and get chicken quarters from Perdue for $0.59-$0.89/lb. I can get a tomahawk steak for $14.95/lb (the chefs were shocked), a whole salmon (whole) imported from Canada, received today for $6.95/lb. I can get 10 lb onions for $4.95. Leg of lamb (whole) is $4.99/lb

Restaurants pay 20-30% more than these prices as the baseline to Baldor or Sysco. I guess that 20-30% slippage does not matter for the restaurant when it is charging 4x-5x of the raw cost per plate.

[Spooky23]

They pay more to Sysco for trade credit and delivery. When you buy at a restaurant depot type place, prices are similar to a Costco for unfinished cuts.

As for the supply of meat, expect that to change. In upstate NY most cuts of beef are gone and trimmed chicken is either not in stock or sold before noon.

[notyourday]

But that's the thing - a restaurant depot is not suffering from the lack of customers because it is not designed to sell commodity products at a premium.

[chii]

i find it hard to believe that restaurants pay more than retail for the same goods.

[sk5t]

I also find this baffling, restaurants keep a very close eye on ingredient cost.

[notyourday]

You can create an account on most of the restaurant supply services and place pre-paid orders. You would be shocked at the pricing ( there would be a minimum order value as well )

[jefftk]

I've been placing orders with a specialty restaurant supplier here in Boston, and the prices are generally equal or better than retail. Including delivery! As long as we're up for eating the minimum quantity it's a good deal.

[notyourday]

They are comparable to Whole Foods or special store prices which are significantly higher than prices in grocery stores regular people ( read : people who don't spend $100/dinner for two and don't bat an eye ) shop.

[jefftk]

I'm pretty price-conscious, and our household spends ~$140/person/month on groceries (with most meals eaten in the home).

Here are some things I've gotten from https://www.baldorfood.com/ in the past few weeks, including delivery:

* Bread flour at $0.46/lb

* Yeast at $4.96/lb

* Vanilla extract at $2.55/oz

* Cherry tomatoes at $1.42/pt

* Onions at $0.90/lb

* Honeycrisp apples at $1.05/lb

* Baby spinach at $4.38/lb

These are all as good or better than the Market Basket (local cheap grocery store) price, and the quality is higher. There are also many products that are fancier and more expensive than they would be at Market Basket, but I can just not buy those.

[notyourday]

Since of those I will only buy a few items I can tell you the prices here, in NYC in a non-ethnic but non expensive supermarkets:

* Cherry tomatoes when available: $1.00/pt

* Tomatoes: $0.99-$1.50/lb, right now up to $1.69lb

* Onions: $0.59/lb

* Honey crisps: $4.99/bag ( 5lb per bag )

* Baby spinach: $2.49/lb

So the mass consumed vegetables are are about 2x the price of a local super market and they have $250 min. Try meats and fish and you see the similar level of markup.

I think their business model is to provide single point logistics services covering ingredients to companies that take those raw ingredients and do value add ( restaurants ) and selling on credit. That model does not work if there are no buyers for the logistics service.

I think should they be delivering to consumers, their competitor is instacart where the basked ends up being 20-80% higher than the same basked would be should it be filled directly in a supermarket. ( counting all the fees )

[smnrchrds]

Why do they do it then? Why won't they simply buy retail?

[notyourday]

I asked that specific question from a friend of mine.

His answer was:

* we charge $20 for a plate that costs is $4 in ingredients because we are lazy to squeeze it down to $3.50.

* Single sourcing means I don't have to trust ten of my employees with credit cards to run around the city to get stuff.

* Single delivery means I can schedule it better.

[cgpcraig]

Retail packaging is a pain to deal with, take for example salt. You usually buy it in small boxes, about 1-2lbs each, commercial bags are 40-50lbs. So you need to buy 20-30 boxes a week at your local store, open the boxes one by one and empty it all into your restaurant bin. It's really a convenience thing, it's much easier to handle, transport and store a single really big bag. You still buy retail for stuff that makes sense though, maybe you only need like 2lb of lemons a week to make a sauce, in that case you'd go retail.