By Daniel Kline
Source: The Street
In retail, bigger almost always equals better. That might not be true in niche specialty markets, but when you move into broad commodities — like the grocery business — size matters. That’s actually more true in the grocery space than other consumer goods because multiple players have decided to largely use groceries as a loss leader.
Walmart, Costco, and Amazon have a national footprint and they don’t need to make a high margin (or any margin) selling groceries. Both chains can use food as a loss leader to help them capture customers for their other businesses. Basically, all three of these major chains with massive buying power have the ability to sell groceries at whatever price they want.