[Y-bar]

I used to stuff shelves at a grocery chain ~20 years ago and one difference seldom mentioned is that grocery chains bought from the manufacturers. That meant that we as a grocery chain were responsible for the sale to consumer, we were not merely a marketplace for a bunch of different brands.

So, even if we had our own competing labels for some products, the manufacturers would never be left in the cold with unsold stock (if for example we chose to drop one brand or run a promotion for our own).

[zachware]

This is generally not how grocery operates today.

Most large grocers:

  - Sell shelf location slots to the highest bidder.
  - Include a consignment clause in their vendor agreements requiring vendors to take back spoiled, customer-damaged, and unsold inventory at X point or on-demand.
  - Require merchandisers to keep inventory in-stock for as many products as they can get vendors to manage (e.g. the coke delivery person is in-store several days a week.)

All of this is especially true for shelf stable products and beverages.

The modern grocery store is effectively managed like a flea market and is allowed to do so because the chains have so much leverage.

So while we can take issue with Amazon’s practices, we have to remember that most of large-scale retail operates in ways that if written about to the level of Amazon, we’d also be griping about.

[Y-bar]

Are you maybe describing US practices? Some of these practices has been prohibited for a decade in EU and it was recently broadened to include agricultural and perishable products: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELE...

[zachware]

Yes, US.

Possibly related is that EU grocery margins are amongst the lowest in the world.

[gamblor956]

What you have described is false. The major brands do not "sell shelf location slots" to the highest bidder (aka slotting fees), or require consigment clauses, or require merchandisers to keep inventory in-stock, as a general practice.

Slotting fees and consignment clauses only apply to new products. Slotting fees are used as an alternative to consignment; they are basically a discount on the wholesale price paid by the store for new products that may not sell through. Alternatively, the store may sell the items on consignment, in which case it only pays the distributor for products actually sold through.

Merchandisers...are employees of the stores (they're responsible for internal marketing efforts)...Perhaps you meant distributor? Only a few store chains have an in-stock requirement (Walmart and Costco), and that is due solely to the volume at which they sell-through.

More importantly, and the crucial legal distinction: retail stores pay the distributors for the inventory on their shelves, except for the 1% offered on consignment (i.e., new products sold on a trial basis), while Amazon gets paid by the distributors. That legal distinction is at the heart of why what Amazon does is problematic.

(Source: Kroger was a former client.)