Jeff Campbell

Hi! I'm Jeff Campbell. I was a leader for Whole Foods Market for over 2 decades. I worked in 9 stores in 4 states, not counting the hundred-plus stores I've assisted in other ways. I was a Global All-Star, a Gold Pen Winner, and won Top-10 Store (company-wide) 3 times in addition to Best New Store (company-wide). Click Here to learn more about me. Click Here to learn more about my site. Editorial Policies.

Why Do Grocery Stores Have Sales? (and how they get picked)

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Grocery store sales often seem like a great deal. But sometimes when we look a little closer, we might realize it’s not quite as good a deal as we thought. So why do grocery stores have sales?

Manufacturers give stores discounts which temporarily lower the price on well-known items as well & newly introduced items. But, grocery stores often discount items that are short-dated or out of season in order to sell through excess inventory. Any dollars are better than no dollars if it has to be thrown away.

But there’s a lot more to know about grocery stores and products on sale.

So in this article, we’re diving deep into the sometimes complicated world of grocery store sales. We’ll look at why they have sales instead of just everyday low prices. But we’ll also explore how they pick items and how to get the most out of your discounts.

Let’s dive in!

Are grocery store sales designed to make shoppers buy more?

Yes. Grocery stores put items on sale that you might not otherwise plan to purchase. But they may also put things on sale that naturally go together with other items, such as a sale on red wine displayed next to bags of pasta and jars of sauce.

For most people, buying groceries is a well-planned activity.

We take inventory of what’s in our cupboard. Then we make a list. We might even use our store’s coupon app to see what coupons are available for us to use.

Most of us with families never go to the store without a list and fixed budget. For my wife and me, that day is Thursdays and we allocate exactly $200 for our family of 5 to get us through 1 week. But if that sounds like a lot, I still remember back when our budget was $80 for the week.

That works most of the time but sometimes, when there are awesome sales, it fails to work.

This is because the sales are enticing and are presented in a way that makes us think that we getting more value for their money.

Now if it’s something already on our list, that’s great.

But most of the time they aren’t things we need or thought of. They are “wants” and not “needs” if you get my distinction.

This is one of the reasons why stores use sales. It helps them drive customers to make extra purchases which mean more profit for them.


Having sales also bring attention to products that don’t sell as fast.

By placing sales or coupons on slow-selling items, more people will be able to notice the products and possibly want to try them out.

If they end up liking it, they will come back for more in the future.

If it picks up sales such that the store doesn’t have to get rid of it, that’s a win-win for the store, the customer, and the manufacturer.

The best way to stick to your budget is to stick to your list and walk right on by those enticing sales.

Even if the products have great discounts, if you end up throwing them away when they go out of date, you haven’t actually saved anything.

How do grocery stores decide what goes on sale?

Most of the time the grocery stores don’t decide what to put on sale.

Such decisions are usually made by the manufacturers who supply the stores with products. That’s at least true of what goes into the store sales flyer. Those products are often presented to the store’s corporate buyers by the manufacturer’s sales reps 6 or more months in advance.

In other cases, however, the store or department managers can decide to put something on sale. That’s especially true of what’s called “short-dated products. These are things that are expiring soon. In this case, selling them at a discount is better than throwing them away and making nothing.

Grocery stores may also place items on sale based on the season.

For instance, you’re not likely to see whole turkeys being put on sale other than right after Thanksgiving. This is because after Thanksgiving is done, most people don’t want to buy turkeys. So if they over-bought for Thanksgiving and have a ton left over, a sale may be the only thing that can save their profit margins.

The same applies to other products such as hams that are put on sale after Easter.

The seasonal discounts are also driven by the competitiveness among grocery stores. Most people will be looking for a specific product during the specific season.

So, most stores will want to outdo each other and have the best prices. That enables them to make the most sales possible.

This can only be done by giving consumers the discounts they want. So often that means putting things on sale to bring the customers in.  They also know that if a customer comes into their store for a specific item, they are more likely to do the rest of that shopping there too.

They also are more likely to convert that shopper to shop there for the rest of the year too.

Can I use a coupon on top of a sale price?

In most cases, yes you can use a coupon on an item already on sale. But always read the coupon first.  There are store coupons, manufacturer coupons, and some are online, while others are paper. Often times the coupon will be from a manufacturer whereas the sale price will be from the store.

You should understand the limits that every store has before you try to combine them.

My local HEB store where my wife and I shop has an online coupon app. But we still grab the store’s paper coupons for items we’re buying just in case. While not always the case, there have been plenty of times that an item is on sale plus has a coupon.

So yes, in those cases, we get both discounts, which is great!

By learning about the limitations, you’ll be able to find the best deals. Just watch the cash register as you are checking out to make sure you’re getting your discounts.

These days store POS (point of sale) systems are complicated.

Most chain stores have corporate tech teams who program the coupons and sale prices. Then the local stores often have IT people maintaining that. And that’s on top of the cashiers ringing everything up.

Every step along that process is a chance for human error to come into play. So it pays to pay attention when you’re getting rung up.

On top of combining a sale price and a coupon, there is also what’s known as coupon stacking.

In this case, you use both a store coupon and a manufacturer coupon. Target is one of the big stores that allow this, but a place like Wal-Mart doesn’t. Check with your local store to see if they allow it.

It’s a great way to get even better savings!

Here is a handy cheat sheet for some of the biggest store’s coupon policies

Store Allows Competitor Coupons? Allows More Than 1 Coupon Per Item? Allows Digital Coupons on  Your Phone? Has Coupon App for Android? Has Coupon App for Apple?
Safeway No Varies by store No. Must be printed Yes – Safeway Deals & Rewards Yes – Safeway Deals & Rewards
Kroger No stated policy No stated policy Yes as long as it scans Yes – Kroger Yes – Kroger
Walmart No No No No No
Target No Yes, but only 1 of each type Yes as long as it scans Yes – Target Yes – Target
Whole Foods No, except stores in Michigan Yes, but only 1 of each type Yes as long as it scans Shows Sales but Doesn’t Have Coupons Shows Sales but Doesn’t Have Coupons

Why don’t grocery stores just have everyday low prices instead of sales?

Having prices on daily low prices is great in theory. And some chains do operate that way like Aldi, for instance.

The downside to that is it can give the impression the store is low-end or cheap. That is, indeed, how most people see Aldi.

Consumers will have the impression that the products sold by that store are cheap. Even worse if they think a store is selling returned or out of date items. Once a store gets that reputation, they often lose all but the most frugal bargain shoppers.

Aside from Aldi, other discounters like Grocery Outlet also fit that model. Although truth be told, most of those types of stores still have sales.

Having a sale also makes customers feel like they are getting a deal. This gives them loyal customers and major sales can put them above the competition.

But sales are also designed to get customers to buy products they don’t even need.

This makes it a great way for the stores to clear out some of the old products without incurring huge losses. Or gets new products in the hands of consumers who might not know of that product yet.

Plus in many cases, it’s the manufacturer giving at least some of the savings, so it’s not all coming from the grocery store’s profit.

Most stores only put up sales for a specific duration.

Some also have clearance sections all the time. By doing that, their customers actually seek out the clearance section. And even at a deep discount, every purchase off the clearance shelf is a purchase no one planned to make.

And again, even selling something at 50% off is better than throwing it away and making nothing.

What day do grocery stores mark down meat?

Tuesdays are one of the best days to shop around for discounted meat. Most grocery stores get their meat during the weekend and then again later in the week. So after a busy weekend, they will often discount whatever’s left to make room for the next delivery.

Of course, different stores have different policies too, and busier stores may get multiple deliveries throughout the week.

So there isn’t a one-size-fits-all answer.

But for those that do, they will try to sell it as soon as possible by Monday. Any meat still on the shelf will be marked down.

It’s also a good idea to shop around any day after the store has had a big sale.

The big sales usually have some discounted prices. But if you go one day after the sale is over you’ll most likely find what was left after the sale.

And those will be even cheaper than the price used during the sale!

The right timing is also as important as going on the right days. For meat departments, in particular, those employees and the meat manager typically work early; like 4 am or so.

So between 8am and 10am shortly after they’ve checked the dates of what’s on their shelves is a great time to shop. They’ve culled their shelves and slapped sale stickers on anything close dated.

Shopping during these times is also ideal because there are a few people available in the stores.

As I said above, every chain might operate a little differently from one another.  So befriending the employees or butcher is a great idea.

You’ll be able to find out their schedules regarding the markdowns. And you’ll be able to get the best deals.

Remember to keep the discounted meat frozen if you can’t use all of it immediately. A ziplock freezer bag helps keep freezer burn away, but unopened packages of meat or poultry should be fine at least for a few weeks to a month.

Is buying discounted meat or poultry a good idea?

Yes. As long as the meat or poultry isn’t past its freshness date, you can save a lot of money buying discounted meat. Just place it in the freezer when you get home, and then use it within 3 months when it may start to develop freezer burn.

Like other discounted products, buying poultry and beef for a discount can help you save a lot of money.

So that makes it a good idea. Just don’t buy stuff solely because it’s on sale. Know what you already have in your fridge or freezer. Then plan out your meals and buy accordingly. That ensures you don’t end up wasting something.

Buying discounted meat helps you save a lot of money and is a great way to cut your grocery bill.

Because it was almost expired when you bought it do be cautious when thawing. Many people like to thaw frozen meat by setting it in the sink for hours on end.  Since this product was close to bad, it should not be thawed that way.

Instead, you can either use your microwave defrost setting. Or, place the meat or poultry in a ziplock bag and place it in a sink filled with warm water. Then just place a heavy pot on top to keep it submerged.

20 minutes should be about right to thaw most things.

Final Thoughts

In this article, we took an in-depth look at the world of grocery stores and sales.

We examined why they have sales and how they pick the items that go on sale. But we also looked into things like when meat goes on sale. And if buying meat on sale is a good idea.

Ultimately, we answered the question of why do grocery stores have sales.

Sales are usually good for both the consumer and the store but as the customer, you have to ensure that you choose your products carefully and check their expiration dates.

Try to avoid impulse buying.

But if you can’t, make sure you can use the items you’re buying on sale; especially if the expiration date is close. You should also try to get value for your money by looking for things on sale that also have a coupon available for discount stacking.

Why Do Grocery Stores Change the Layout? (the real reason)

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Love it or hate it, we all go grocery shopping. But if you know grocery stores, you know they frequently move stuff around. For most shoppers, these changes are confusing and often leads to the question, why do grocery stores change the layout?

Driven by lower profit margins & high competition, grocery stores are desperate to make their stores better than their competitors. One of the best ways to do that is by changing the layout. But it’s also a way to force shoppers down every aisle, counting on them making additional purchases they hadn’t planned on making.

But there’s a lot more to know about why they change stuff, how they do it, and how often it happens.

So let’s keep going!

Why do grocery stores rearrange everything?

Like other businesses, grocery stores want to make as many sales as possible.

This is the best way to make additional profit and possibly expand. After all, the average grocery store only makes a net profit of around 2%. Think of it this way. For every dollar they take in, only about 2 cents is actually profit after every expense gets paid.

I go into much greater detail on grocery store profit margins in a recent article. In that, I also explain why a Whole Foods, for instance, might make 2-3 times as much profit percentage as a Safeway or Kroger.

Just click the link to read it on my site.

So to maximize those profits, they need their customers to purchase more items than they intended to in the first place. For that to happen, they need to make it harder for the customers to find the items they need.

This is where rearranging the store comes in.

Moving whole aisles or departments

By changing where the items are placed, the customers will have to walk around the store as they try to locate what they want. For instance, if you visit the store today then go back a few months later, you’ll find that some items are not where you found them.

As you walk around trying to locate them, you’ll see other items that catch your eye and you’ll end up buying them in impulse. If the products were left in the same place year after year, you’d probably pick up exactly what you came for.

Then, most likely you would leave without ever buying anything else.

Rearranging the store also allows the placement of best-selling products at the front and that ends up enticing the customers. But savvy retailers also know that profits are higher on some items more than others. So they’ll also rearrange things putting the higher-margin items more in your face.

Moving certain shelves or areas

The other time stores rearrange is when a new product comes out.

There are times when a product stops being made by the company. Or, maybe it just didn’t sell well and your store decided to stop selling it. Or a popular brand introduced some hot new products.

In all of those cases, the store has to rearrange stuff to fill the space of a product that went away, and/or make room for the new stuff.

Lastly, rearranging items allows the store to get rid of products that are about to expire.

They might build a whole display of potato chips that expire in 2 months. They hope to sell at least some of them before they go out of date. After all, any bag sold, even at a discount, is one they don’t have to throw away and lose 100% profit on.

What is it called when you rearrange a store?

Rearranging a whole store, or just certain departments or aisles is called a reset.

A reset involves taking everything off a given shelf or the whole aisle (or occasionally the whole store), deciding how to rearrange it, and then putting it back.

In the old days when I started with Whole Foods, we just did the planning part on paper or in our heads. And I still remember doing one at the original Whole Foods store (long gone) where we had a whole aisle collapse 10 minutes before the store opened!

These days, however, there is what they call category management software or planogram software that can design the layout for you.

It does require a lot of work on the front end as you have to enter the size of every product (boxes, cans, bottles, etc). You also have to enter in the cost and sales price. Then it gets fancy and gives you the best layout based on sales, profit, and the packaging size as well as what products make sense sitting next to each other.

For displays, however, which change more frequently, there is also what’s called cross-merchandising.

This is the process where you place products together even when they are not directly related, to try to boost their sales. For instance, by placing produce next to the flowers, customers’ sensory is tricked into thinking that the products are fresh thanks to the smell of the flowers.

But anytime you see a display of boxes of pasta and jars of pasta sauce with a stack of wine bottles, that’s cross-merchandising too.

Most consumers tend to buy only items they need from the store; many just going down a written shopping list. So grocery stores can get these customers to add-on by placing additional items nearby they might buy on impulse.

How is a grocery store organized?

1. The front of the store

Most stores start by placing flowers at the front.

That is often the first item customers see when they get into the store. Produce is placed next to the flowers because of the freshness of the flowers. The freshest and most seasonal produce (and also often the cheapest) is placed at the front while that is not so fresh and is put in the back.

That’s designed to give the impression that everything is fresh, seasonal and low-priced.

Other products kept near the entrance are those that are referred to as “grab and go”. These are items such as bottled water, snacks, and even milk.

Customers can easily grab some to consume as they shop which they might not have done otherwise.

Large stores also place banks closer to the entrance. This makes it easier for customers to withdraw money to be used in the store. Apart from discounted items, new products or products that are in high demand during a specific season are placed at the end of the isles.

Candy, magazines and other products that can be bought on impulse are usually placed near the registers so that customers can pick them as they wait and they won’t have enough time to change their minds.

2. The departments around the perimeter

Bakeries are usually placed beyond the entrance. The fresh baking smell usually triggers hunger pangs and will most likely lead to shoppers buying more food items. I even know of 1 chain that has a special air conditioning system to pipe the smells from the bakery to the front of the store so it hits you the moment you walk in.

Deli and coffee bars are usually located closer to the bakeries in one of the corners. Free cooking demonstrations and samples of free products are usually placed on one side of the walls on the outside.

3. The center of the store

Other household merchandise such as cooking ingredients and canned foods are usually placed in the center aisles.

The back walls usually have staples like eggs, meat, and dairy products. By the time the customers get to the middle and the back shelves, they will have seen other non-essential items along the way and probably bought them.

What is the psychology behind retail store layouts?

Most grocery stores place products that bring in the most profit at the eye level. By placing the profitable products within easy reach, they increase the frequency they are bought and profits.

Since most customers go to the grocery store in a hurry, they’ll end up picking the products their eyes first come in contact with. They will not have time to look around as they try to compare brands and prices.

Placing the expensive items at the end of the aisle is another layout that grocery stores use.

This also attracts shoppers who are in a hurry and therefore don’t have time to compare prices. They just pick the closest products even if they are not the cheapest option available.

Here are some of the other psychological reasons to rearrange a store:

1. Color Breaks

Color breaks are another key component of good grocery store merchandising.

By that I mean if you have 2 items that come in a red box, and 1 that comes in a blue box, you WILL sell more of all of them if you put the blue box in between the 2 red ones.

That makes all of them stand out better. It also eliminates the possibility of the customer seeing 1 red one but accidentally grabbing the other one (and later returning it).

2. Products that appeal to the senses

The stores also put out visually appealing items like flowers at the front of the store where you can easily see them.

Since flowers also smell great, they give customers the idea that the store has fresh products. Most people associate the smell of flowers with freshness and they may even end up buying the flowers.

3. Proven ways to drive customers through the store to the back

Other items you buy like milk are usually placed at the back.

This is because milk is an essential product that most people need and will have to buy no matter where it is placed. As the customer tries to get to the milk, they’ll have to pass other products that they could end up buying on impulse.

4. Put the banks up near the front to make sure they have plenty to spend

By putting the banks at the entrance, it ensures customers can do their banking first and have plenty of cash to do their shopping.

5. Give people a reason to hang out

By having a deli, bakery, and/or coffee shop in the corner, customers will not be in a hurry to finish their shopping and go get soothing to eat.

Instead, they’ll spend more time in the store. The more time spent in a store, the more people are apt to buy things. And they might even decide to pick up premade meals for dinner while they are there.

6. How stores pick which items go where on a shelf

The top shelf usually has products that have products from brands that aren’t very popular.

The shelves that are at your eye level are given to the best selling and/or most profitable products. These are products that are from reputable brands and can therefore easily attract attention. They aren’t necessarily the cheapest products but they still sell well because of the reputation of the brands.

The bottom shelves are usually reserved for very heavy or bulky products. That way a customer isn’t having to reach way up to grab a 10lb jug of cat litter or a huge container of laundry liquid.

How often do grocery stores change the layout?

Although there isn’t a specified frequency that retailers follow when rearranging the store, most of them reshuffle a little bit every few months.

But what they call endcaps, the displays at the end of each aisle, often change every 2 weeks or so.

For huge store-wide changes, once a year is not uncommon, while some retailers might rearrange twice every year. There isn’t a set pattern for how often they change. But in a hotly competitive town, you might notice they do it more frequently since they are trying to win a larger share of the grocery sales in the town.

Sometimes rearranging is done at the request of the product vendors.

Believe it or not, many large vendors these days pay the stores what’s called a slotting fee. In other words, they pay the store (a lot of money in some cases) to get good placement in a store for their products.

Good old fashioned quid pro quo.

Some vendors may want the store to place their products at a location that they consider to be premium. In such a case, the store may be forced (by their slotting fee agreement) to make the changes immediately. And yes, that’s even if it’s just a few days after they made their last reset.

Lastly, stores, of course, want to rearrange the store depending on the season.

No one wants to see a huge pumpkin patch out front in June or tons of watermelon in January. Different products are seasonal which means that they’ll sell more in some seasons than others.

So you can bet as we prepare for a new season, big changes are coming to your grocery store’s aisles.

Final Thoughts

Reshuffling the products occasionally is a good way to keep a store fresh and interesting.

But it also helps stores maximize profits by having higher-margin items in better positions. It can also be used to help sell through items about to expire.

But mostly, it’s about getting customers to go down every aisle. That way, while searching for what they came for, they’ll probably buy additional items along the way.

There’s actually a lot more that goes into how a grocery store decides how to build displays and merchandize their store. I cover all of that strategy in a recent article where I break down grocery merchandising.

I even get into some of the secret strategies of how they can build huge displays without using a ton of product (which ties up their cash flow).

Just click the link to read it on my site.

What Happens to Unsold Food in Supermarkets?

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Having worked in grocery stores for more than 20 years, I know the answer, but many shoppers wonder what happens to unsold food in supermarkets??

Every year, more than 43 billion pounds of food from grocery stores gets thrown away. Much of the food is still technically edible, but most large grocery chains severely limit what food gets donated once it’s no longer able to sell it. The reason is out of fear of litigation due to poor or vague laws and regulations.

But there’s a lot more to say about grocery stores and how much expired or damaged food gets thrown away.

So in this article, we’ll get into what the laws say and how much food actually gets donated, tossed or composted. But we’ll also answer whether or not food banks and shelters will even take expired or damaged food items.

Let’s dive in!

How much do grocery stores throw away?

Grocery stores throw out 43 billion pounds of food each year. This includes wilted, moldy produce, spoiled meat & seafood, dented and damaged canned and boxed goods, as well as baked goods that are stale or moldy.

(source)

Beyond that, the Center for Biological Diversity recently conducted a survey where they looked at specific grocery chains and how well they fared in terms of food donation.

They looked at the following criteria:

  • Committing to move towards zero waste
  • Tracking of expired foods and their donations
  • Systems in place to prevent or limit food waste

Then after examining each grocery by those standards, they came up with a report card grade. Check out that here:

Do supermarkets throw away food?

Yes; grocery stores throw-away billions of pounds of food each and every year. While some of it could be given to food banks, food safety laws actually prevent much of it from being donated.

In the 20+ years I worked for Whole Foods Market, many spent in middle or upper management positions, I can tell you that the majority of expired food and damaged packaged goods do indeed get thrown away.

Now, I don’t say that to make anyone mad or make it seem like the grocery industry is hiding a secret.

And I also don’t want you to think that all grocery stores are the same and that nothing gets donated. There’s actually quite a bit of food that gets donated.

But there’s a lot that just ends up in the landfill.

A recent report by Harvard Law School looked at the laws on the books in all 50 states as far as food safety regulations regarding food donation.

Their report concluded that:

  • “Guidance regarding food safety for food donations vary widely from state to state”
  • “Many states have no regulations or guidance”
  • 12 states have laws or regulations pertaining to food safety for food donations
  • 14 states have issued public “statements” regarding food safety and donations

In short, in terms of legislators encouraging, supporting, and protecting retailers in donating more of what’s currently being thrown away, we have a long way to go.

Can grocery stores give away expired food?

The short answer, especially if you mean legally, is yes. Grocery stores can legally donate food that is past its expiration date according to the USDA.

To be specific, they say:

“Yes. The quality of perishable products may deteriorate after the date passes but the products should still be wholesome if not exhibiting signs of spoilage. Food banks, other charitable organizations, and consumers should evaluate the quality of the product prior to its distribution and consumption to determine whether there are noticeable changes in wholesomeness”

That being said, in our litigious society, many large corporations are hesitant to donate some items that could be deemed questionable in terms of food safety out of fear of getting sued.

So while it’s sad in a way that some grocery stores don’t donate all they could out simply due to fear of being sued by a food bank or charity,

That being said, there is some legal protection for those who donate under the Bill Emerson Good Samaritan Food Donation Act. That act was put into law to encourage the donation of “food and grocery products to nonprofit organizations for distribution to needy individuals”.

The problem with the law, and why it didn’t cause as much donated food as they hoped is that it also states “This immunity does not apply to an injury to or death of an ultimate user or recipient of the food or grocery product that results from an act or omission of the donor constituting gross negligence or intentional misconduct.”

Since a large national grocery chain can’t control the process in each of their hundreds of stores, many would rather simply avoid any possible claims of negligence or misconduct.

After all, they are risking millions of dollars and putting that risk in the hands of employees likely making between $10-$15 per hour. Many companies simply would rather risk criticism over their policy than spend millions on lawsuits.

Will grocery stores donate food?

Yes, is the short answer.

At all of the 10 different Whole Foods stores I worked at over the years which ranged from east to west coasts, we donated the following:

  • Day-old bread and pastries
  • Dented cans and boxes
  • Damaged (but not moldy) produce items

We did not, however, donate deli foods from the hot or cold salad bars, much of which got tossed on a nightly basis. Also, it’s worth noting that many Whole Foods stores (and probably others too) do a good job of repurposing food that is still good (and not expired) but isn’t up to display standards.

By that I mean, bruised apples might be transferred from the Produce department to the Juice Bar. Or a bag of rolled oats with a torn label might be cut open and put into the bulk bins.

We also know from the above report card, that the most donation-conscientious retail grocery chains (of the ones surveyed) are:

  • Kroger
  • Wal-Mart
  • Whole Foods
  • Target
  • Aldi

And the flip side, we see that the worst-performing grocery chains (again of the ones surveyed) include:

  • Trader Joes
  • Costco
  • Publix

The real irony here is that Trader Joes and Aldi are owned by the same family (different parts of that family though).

Of course, there are countless other grocery chains and local stores that likely weren’t part of that survey. So when in doubt, ask your local grocery what their food donation policies and programs include.

Do homeless shelters or food banks take expired food?

Of course, every shelter or food bank across the globe may have different policies.

That being said, many only take shelf-stable non-refrigerated canned, boxed, or bottled items as a safeguard against food-borne illness.

Feeding America is a nationwide network of over 200 food banks. Chances are the one in your town is affiliated with them. But even their site says to check with your local branch to see if they will take donations of perishable (fresh, refrigerated, or frozen items).

And surprise, surprise, all the local branches I checked either didn’t take those things or were vague about it.

Do homeless shelters or food banks take expired food?

Yes. Most homeless shelters and food banks will accept expired food products. But most prefer to only take non-perishable items packaged in cans, boxes, or bottles.

Of course, every shelter or food bank across the globe may have different policies.

That being said, many only take shelf-stable non-refrigerated canned, boxed, or bottled items as a safeguard against food-borne illness.

Feeding America is a nationwide network of over 200 food banks. Chances are the one in your town is affiliated with them. But even their site says to check with your local branch to see if they will take donations of perishable (fresh, refrigerated, or frozen items).

And surprise, surprise, all the local branches I checked either didn’t take those things or were vague about it.

Why do grocery stores order more food than they can sell?

Grocery stores do not over-order with the intent of throwing away products. With profit margins as low as 2%, they can’t afford to do that. Instead, they try and balance having their shelves full and abundant while meeting and not exceeding set shrink targets that are often about 3% of the total.

But the reason here might surprise you unless you work retail.

In short, displays of food items sell much better when they look full. Now sometimes good merchandisers use dummy risers and other things to give the appearance of fullness without over-committing to too much product.

But ultimately, if stores only had on display what they would actually sell, their sales would go down as many stores would look like a coastal store after a hurricane warning was announced. In other words, the shelves and displays might look kind of barren and empty.

Psychologically we, as consumers, tend to respond poorly to that.

Think back to when you were at a store and saw that they were almost sold out of an item and you mostly saw a big empty shelf.  Did you buy that last one?  If you’re like most people, unless you were desperate for that 1 thing specifically, you probably didn’t.

So grocery stores, within reason, order to make the store look full and abundant.

Then they balance that with not tying up too much cash in inventory that might sit there for months or spoil. There’s a fine art to merchandising a grocery store.

So if you want to learn even more about the mentality of grocers, and why they are constantly moving the aisles around, check out a recent article where I break it all down.

Just click that link to read it on my site.

Final Thoughts

In this article, we took an in-depth look into the world of grocery stores and what they do with out of date or damaged food items.

We explored the truth about how much gets thrown away compared to donations or composting.

Ultimately, we answered the question of how much do grocery stores throw away. Running a successful grocery store requires wearing a lot of hats. After all, you are balancing customer service, merchandising, employee relations, and trying to stay profitable so you can pay everyone.

Learn more about grocery store profit margins, including why some grocery stores only earn 2% while others make 10% or more, in a recent article, where I explain it all.

Just click that link to read it on my site.

How Much Does a Grocery Store Owner Make?

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I was a grocery store general manager for many years, but I always wondered if I went off on my own, how much does a grocery store owner make?

Grocery store owners make anywhere from $60,000 up to around $300,000 or more. Location, size of store & whether it’s a franchise affect the pay range the most. While grocery store owners on the top end, do earn more than a grocery store manager for a company, that is not the case on the low end of the range.

But there’s a lot more to get into about grocery store owners and their salaries.

So in this article, we’re diving deep into the world of grocery store owners. We’ll compare how much they make, on average, compared to grocery store managers working for a chain. We’ll even compare that against Walmart store managers.

Lastly, we’ll see how much you could earn as a grocery store owner compared to owning other types of retail stores. Let’s get going!

What is the typical grocery store owner’s salary?

A grocery store owner literally owns their business, or are at least franchising it from someone like Grocery Outlet.

So right out of the gate, we know there’s a lot more pressure on them than if they worked for someone like Safeway, Kroger, or Whole Foods Market, where I spent 2+ decades of my life.

So does all that extra responsibility add up to extra dollars? Let’s see!

On average, grocery store owners make around $62,419/year according to Indeed.com. But there’s a lot that factors into that, such as:

  • Location
  • Size of store
  • If it’s a franchise

Some grocery store owners, like a small specialty shop on the streets of NYC, for instance, might clear multiple 6 figures. By comparison, a Grocery Outlet store in a neighborhood that’s heavily reliant on food stamps might only earn $60,000/year.

Bear in mind too, it’s hard to get exact numbers from independent grocery stores that aren’t publically traded. There are no financial reporting requirements, nor are grocery store owner salaries listed on sites like GlassDoor.


A franchise like the one offered by Grocery Outlet Bargain Market or Save-a-Lot can be a great way to own your own business (sort of) and can pay really well too.

Pay is a range, of course, but some owners make around $70,000 on the low end up to the mid 6 figures.

It also gives owner-operators the freedom and flexibility to run their stores how they wish (sort of) and keeps a nice chunk of the profits while at the same time, also giving them a certain level of corporate security and systemization.

I have a recent article that breaks down the Grocery Outlet Franchise program and whether or not it’s worth it. I get into everything from earnings potential and how they split profits, including the 1 thing that would probably prevent me from doing it.

But they do have some owner-operators making $300k/year. So for many, it’s a great opportunity. Just click the link to read it on my site.

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How much do grocery store managers make a year?

I was a GM for Whole Foods Market for well over half of my 20+ year career. Whole Foods calls their GMs Store Team Leaders.

During that time, I ran 4 stores and was an Associate Store Team Leader (assistant GM) in 4 other stores.

On average, and bear in mind the last time I did this was in 2013, so it’s been a little while, I made in the low 6 figures. While I knew some store managers who made around $150,000 a year (salary plus bonuses), I never got that high.

Officially on their website today, Whole Foods lists the starting salary for their GMs as $99,000/year.

But while I’m sure things have changed since Amazon bought them, that’s most likely without bonuses. The bonus structure for Whole Foods Market store managers provided a quarterly bonus on top of their salary. The bonus was based on a somewhat complicated profitability calculation.

So while in a store that wasn’t doing well, that bonus could be nothing, I also knew store managers who bought brand new Jaguars with just 1 of them.

So for many, compared to the risk of being a grocery store owner, it makes sense to be a grocery store manager for a large company.

But outside of Whole Foods, here are how store manager salaries stack up in other grocery stores, according to GlassDoor.

Grocery Store Annual Salary Range
Kroger $67k to $70k/year
Piggly Wiggly $50k to $54k/year
Safeway $88k/year
Whole Foods $99k/year
Albertsons $95k/year
Wegmans $78k to $83k/year
Sprouts $82k/year
Publix $116k/year
Ralphs $98k/year
The Fresh Market $58k to $63k/year

The interesting takeaway here is how wide the range is for essentially the same job.

On the low end, we have Piggly Wiggly and then The Fresh Market, and on the high end, we have Publix. Of course, I can see why a Publix GM would make more than Piggly Wiggly. Publix stores are much larger, with more moving parts (like a pharmacy), and do a lot more sales volume.

By definition, larger sales volume means more employees and more customers, all of which take up the time of a GM.

I was a little surprised Wegmans was so relatively low given they are somewhat similar to Whole Foods, just exclusively on the east coast.

It was also interesting to see a difference between Safeway and Albertsons given they are the same company and their stores are similar.

How much does a Walmart store manager make?

While people love to make fun of Walmart (or at least their customers), Walmart store managers do quite well, on average.

Going back to GlassDoor for my research, Walmart GMs make between $100k/year up to $141k/year.

But there’s also no doubt that a Walmart GM probably deals with a lot more crazy stuff than I did with Whole Foods, not even counting the multiple instances of shootings that have happened there.

Obviously, if you’re running a large, newer Walmart in a large urban city, you’re going to make more than someone running an old 1980’s looking Walmart in rural West Texas.

But since the Walmart store manager gets a base salary on top of various bonuses. Let’s take a look at those:

  • Actual range of base pay – $32,903 – $194,446 (average $100,076)
  • Cash bonus – a range of $42k to $141k (average $71,943)
  • Stock bonus – a range of $1k to $16k (average $1,321)
  • Profit-Sharing – a range of $1k to $26k (average $3,531)
  • Commission-Sharing – a range of $1 to $204 (average $102)
  • Tips – An average of $204/year

Do grocery store owners make more than other retail business owners?

Yes, is the short answer. At least compared against retail store owner salaries on average.

The average retail store owner makes an average of $49,924/year according to Payscale. That’s based on a range of annual salaries that falls to $24,000 on the low end and $149,000 on the high end.

As I mentioned above in the Walmart example, the location of your store will make a huge difference in pay. It’s also very true that running a Wine shop in Manhattan is very different than running a convenience store outside of Memphis, so it is a little hard to compare apples to apples.

As a sole owner of a large retail store in a decent-sized city, there’s no corporation to back you up.

If your store isn’t profitable for 1 or more months, there aren’t dozens or hundreds of other stores making a profit to balance that out like there would be if you were simply a GM for a large company.

Done right though, your earning potential could be multiple hundreds of thousands of dollars per year; maybe as high as $300,000/year.

But many of these retail store owners will be franchise owners.

That not only means they don’t quite have the same freedom as a true independent store owner, but it also likely means they paid a lot of money upfront to join that franchise. After all, most franchise companies require an initial cash investment of anywhere from $10,000 to over $100,000.

On average, though, franchise owners can expect to make a cash investment of $20k-$35k.

If they then turn around, work like a dog only to earn $49k/year, that doesn’t exactly sound like paradise to me. Now it is true that if you are part of a franchise there is less risk and less start-up cash needed than if you truly opened your own business.

After all, a Subway franchise owner has the entire Subway marketing, distribution, and operations team behind them to help them succeed. A true independent owner has themselves and their employees.

Grocery store profit margins have a lot to do with how much the owner’s earning potential is.

I have an article that breaks down everything you need to know about grocery store profit margins, including how small changes could mean the difference between a 5 figure salary and a mid 6 figure salary.

Just click the link to read it on my site.

Final Thoughts

In this article, we took an in-depth look into the world of grocery store owners and how much they make in a year.

We examined not only their salaries but how they stack up against other retail industries. And we compared those salaries against what grocery store managers who work for a chain store might earn.

Ultimately, we answered the question of how much does a grocery store owner make?

If you’ve ever wondered whether owning your very own grocery store is worth it, it can be! I have a recent article that breaks down just how profitable it can be to own your own grocery store. I even cover start-up costs and everything you need to know to get going.

Just click the link to read it on my site.

Photo credits which require attribution:

Google Cheque epayservice.jpg by J.Archer is licensed under CC3.0

[adthrive-in-post-video-player video-id=”N6uQeidx” upload-date=”Mon May 04 2020 00:00:00 GMT+0000 (Coordinated Universal Time)” name=”How Much Does a Grocery Store Owner Make?” description=”I was a grocery store general manager for many years, but I always wondered if I went off on my own, how much does a grocery store owner make? Here’s what I discovered: Grocery store owners make anywhere from $60,000 up to around $300,000 or more. Location, size of store & whether it’s a franchise affect the pay range the most. While grocery store owners on the top end, do earn more than a grocery store manager for a company, that is not the case on the low end of the range. But there’s a lot more to get into about grocery store owners and their salaries. So in this article, we’re diving deep into the world of grocery store owners. We’ll compare how much they make, on average, compared to grocery store managers working for a chain. We’ll even compare that against Walmart store managers. Lastly, we’ll see how much you could earn as a grocery store owner compared to owning other types of retail stores. Let’s get going!”]

Can You Fire an Employee for Being Sick? (No, but you can . . . )

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As a GM for 2+ decades, employees calling out sick was just a way of life. But many new managers wonder can you fire an employee for being sick.

No. You cannot fire an employee for being sick. But most employers have an attendance policy and instead would document unexcused absences over a period of time, and eventually fire them for excessive absenteeism, after a series of warnings.

But there’s a lot more to know about employees calling out sick and how you can legally discipline them for that.

So here, we’re getting into absenteeism and what constitutes excessive absenteeism. But we’ll also examine whether an employee can get fired for that and if so if there should be some sort of due process leading up to that.

And what if you are sick a lot and have to use PTO? Can they fire you even if you use PTO?

Click here to read my complete guide to PTO laws and the 1 way they could actually fire you for using it even if you are legitimately sick or on vacation.

As a leader for Whole Foods Market for over 2 decades, I learned a lot, saw a lot, made a number of mistakes, and learned from them too. I also, unfortunately, had to fire a lot of employees, many for excessive absenteeism.

So this is familiar territory. Let’s dive in!

What is excessive absenteeism?

Excessive absenteeism would be 3 more absences in a 30-day period, 5 or more in 6-months, or 10 or more in a 12-month period. But excessive absenteeism may vary from company to company.

But first, we need to understand what exactly is “excessive”.

This isn’t middle or high school and a doctor’s note doesn’t necessarily excuse an absence. It’s also important to understand that while an employer may be subject to state or federal laws, in many cases, it’s up to the employer to decide.

This is especially true in an “at-will” state.

An at-will state is a state in the US that basically allows employers to fire anyone for any reason at any time.

I go into a lot more details about what an at-will state is, including a state-by-state guide, in a recent article geared towards how to fire an employee with a bad attitude.

Just click the link to read it on my site.

Now, having said that, I firmly believe that employers have a moral obligation to be firm, fair, and consistent. And an obligation to make expectations and consequences crystal clear.

If you fire an employee and they are genuinely surprised, you failed as a leader.

First, you need to have a company policy guidebook in place which spells out all your company policies, including your attendance policy.

This should include what the correct procedure is for calling out sick as well as how many sick calls in a set period of time constitute excessive absenteeism.


When I was a leader for Whole Foods, we defined excessive absenteeism as the following:

  • 10 days absent (leaving early or arriving late beyond 30 minutes counts), consecutive or not, in any 12-month period
  • 3 or more absences in any 30-day period
  • 5 or more absences in any 6-month period

The national average for sick days is currently 9 per employee per year, so just under what Whole Foods would have found unacceptable.

But whatever policy you set for your company, have it apply to everyone (including yourself) and enforce it evenly and consistently. Double standards and hypocrites rarely make for successful businesses long-term.

If a boss does go to fire you, can they do that by phone or email?

Click here to read my complete guide to how terminations are supposed to happen and if phone or email is a legitimate way to do it, what happens if they break the law in doing it, and what your rights are as an employee.

How do you handle an employee with excessive absences?

I’m a firm believer in following a 3-step process for virtually all offenses except violence, harassment, and theft. Here are the 3 steps in handling an employee who is excessively absent:

  • Verbal warning – Start with a conversation, done in private where you alert the employee to the issue, remind them of the company policy, and remind them of the consequences. Document this after the fact for their file
  • Written warning – Once they cross another excessive absence threshold, issue a written warning for excessive absenteeism. Get it signed and witnessed
  • Final Warning – Again, once they cross another threshold of excessive absenteeism, issue a final written warning, also signed and witnessed. This should make it clear that the next instance will lead to termination

Next, have a monitoring system in place for everyone from the top down.

Ideally, don’t put this place in response to an employee problem; just have this tracking system in place as soon as possible; ideally from the beginning.

You can use a calendar, an Excel spreadsheet, or some sort of online program or app. Then have a tab for each employee and every time they are not at work when they normally would be, note which of the following categories that absence falls into:

  • Multi-day Vacation (approved in advance)
  • Approved Other Absence (they requested the day off for an appointment, ideally getting their shift covered)
  • FMLA Leave (Family Medical Leave Act Federally mandated leave)
  • Unexcused Absence – Any unplanned absence where they call out

Every time someone is absent, you record that absence. Then perhaps monthly, you review the logs of everyone and see if anyone has exceeded the attendance policy for your company for unexcused absences.

Can I terminate an employee for excessive absenteeism?

Yes. Employees who are excessively absent can be terminated. But have a set system for monitoring, documenting, and communicating about excessive absences, and ensure all employees, including yourself, follow the same rules.

But as much as possible, as the employer, you have to balance being human and being compassionate, with what’s best for the company and, more importantly, what’s best for the other employees.

After all, if you have 1 employee who calls out all the time, and the rest are rock solid, it’s putting a huge burden on those other great employees. So you have an obligation to deal with the absent employee, even if their reasons for constantly calling out seem “reasonable”.

Now, if they are a single mom I don’t want you to be heartless.

But if you constantly make exceptions for them, then figuring out how to determine (legally and morally) when to make exceptions for the rest of your team will become a full-time job. Making constant judgment calls will wear you out, demoralize your team, and ultimately kill your productivity.

So stick with being firm, fair, consistent while also being compassionate.

Ultimately, if you have a fair attendance policy and it’s made clear to everyone when you hire them, then if they aren’t meeting that policy and you’re communicating clearly when there are infractions, it’s 100% on them if you later have to fire them.

Just make sure that everyone on the team (yourself included) is held to the same standard.

Can you get fired for being sick with a doctor’s note?

Most employers would not fire an employee for being sick but instead would fire them for being excessively absent. A doctor’s note would not be a factor unless the employer was legally obligated to offer the employee a medical-related leave of absence.

In an at-will state, you can be fired at any time for any reason, although reputable employers will go through some sort of due process with performance issues.

Even if you’re not in an at-will state, if your absences are excessive (beyond the scope of what’s allowed in the employer’s attendance policy) you can still be fired. Whether or not you have a doctor’s note won’t factor into whether or not you have been excessively absent.

Now if you have an ongoing medical issue, you may be able to request an FMLA leave (Family Medical Leave Act). However, in order to be eligible and request an FMLA leave, the employer has to be what’s called a “covered employer”, which basically means they have 50 or more employees.

Then, you as the employee have to meet certain criteria such as:

  • You must have worked at least 1250 hours in the 12 months prior to requesting leave
  • Work at a location with 50+ employees, or within 75 miles of another location with 50+ employees
  • You have to have worked for the employer for at least 12 months

So if you just started or work for a small company with a handful of employees, the employer is NOT obligated to grant you an FMLA leave. That doesn’t mean they won’t grant you leave, and doesn’t mean they may not have options spelled out in their attendance policy.

But they aren’t Federally mandated to offer you a leave.

Can I sue my employer if I’m fired for being sick?

If the employer is guilty of wrongful termination, they can be sued by the employee. So if the termination was for illness, that would constitute wrongful termination. Excessive absenteeism that had been documented and addressed previously would not constitute wrongful termination.

In the US at least, unfortunately, anyone can sue anyone for pretty much any reason.

That doesn’t mean you’ll win or that your case has merit. But people file lawsuits every day. Ultimately, you’re not likely to be fired just for being sick. If you work for a reputable employer they may fire you for excessive absenteeism.

But ultimately you’re being fired for being unreliable and being a burden to your fellow employees; not because you’re sick.

And if the employer has done a proper job of creating an attendance policy, is consistent with all employees in enforcing that, and there is a clear written paper trail documenting your infractions, you will most likely lose the case.

This is even truer if you live in an at-will state.

In short, filing a lawsuit will cost you time and money and you’d be far better off putting that time, energy and money into finding a new job and owning your role in losing the previous one and learning the lessons from that experience.

How many sick days are reasonable?

The US Department of Labor has noted the following average number of sick days for employees in the US: 7 sick days per year with 1 to 5 years of service, 8 sick days per year with 5 to 10 years of service, 9 sick days per year with 20 years of service.

(source)

So, as you can see, somewhere between 7 and 9 sick days a year probably going to be considered reasonable by most employers.

“Reasonable” will be very different depending on the type of work. But also how many employees there are and how easy it is to get someone to cover your shift.

At Whole Foods, all the stores I worked in and ran had hundreds of employees. That made it easier to cover people who called out sick. A store with 4 employees would have a much harder time dealing with that.

What if you sometimes miss work because you work a 2nd job?

After all, in today’s economy, many of us work 2 or more jobs. And every once in a while schedule conflicts crop up. Click here to read my complete guide on having a 2nd job, whether an employer can fire you for having one, and whether you should lie about it or not.

Final Thoughts

In this article, we took a look at the world of employee absences.

All employers know what it’s like to deal with call outs. And all employees know what it’s like to have to take on additional work and responsibility when we’re shorthanded.

So today we explored the definition of excessive absenteeism and the right way for an employer to handle that. But we also explored how doctor’s notes might factor in and what’s reasonable on both sides.

Ultimately, we answered the question can you fire an employee for being sick?

What is the Profit Margin for Grocery Stores?

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Grocery stores are everywhere: from the small, family-owned market on the corner to the grocery store giants with locations all over the world. It’s clear that the grocery store business can be profitable and sustainable, but what is the profit margin for grocery stores?

Conventional grocery stores have a profit margin of about 2.2%, making them one of the least profitable industries in the US. But they make their money by selling in large volume & multiple locations. However, stores in natural, organic, and gourmet niches tend to see bottom-line profit margins of closer to 5-10%.

But there’s a lot more to know about grocery store pricing and profit margins.

So in this article, we’ll explore margins and markups. But also, how a company like Safeway or Kroger might have different profit margins than a Whole Foods or Trader Joes. Ultimately, we’re answering the question of what is the profit margin for grocery stores.

Time to get down to business!

What Are Profit Margins?

Let’s understand why grocery stores have the profit margins they do. That way, you’ll have a basic understanding of what profit margins actually are and why they’re important.

You’ll also want to know a little bit more about how grocery stores operate as a business. Let’s walk through both aspects before getting into the actual profit margin for grocery stores.

Profit margins are a commonly used term that has to do with describing profitability in business. A profit margin is the number that represents what percentage of sales a business has turned into profit.

In other words and to put it even more simply, a profit margin shows how many cents of profit a business makes for each dollar of sales. And that’s typically represented as a percentage.

There’s actually a lot more that goes into it than just that, though. So let’s dive in a little further.

The Different Types of Profit Margins and How They Work

There are actually different types of profit and profit margins that all blend together. The types of profit margins are:

  1. Gross profit margin
  2. Operating profit margin
  3. Pre-tax profit margin
  4. Net profit margin

All of these types of profit tie in together. But the most commonly used and perhaps the most significant type of profit margin is net profit margin.

If you are confused about the difference between markup and margin, relax. MANY people are confused between the 2. I have a recent article that breaks down both AND shows you how to calculate either one. I also give you a handy chart that shows up number by number what margin a certain mark up is.

Just click the link to read it on my site.

How do all these profit margin types tie together?

Think of it like this: a company has a product in its store that it makes a sale on. When the company takes in the revenue from that sale, it has to pay the direct costs of buying that product.

What’s left after paying the direct costs of the product is the gross profit margin.

For example, if you buy an apple for 50 cents and sell it for $1.00, your gross profit is 50 cents or a 50% gross profit margin.

Next, the company needs to pay its indirect costs, like advertising. Once indirect costs are paid, what’s left is the operating profit margin.

The company will also need to pay other expenses, like debts and charges. Once those are paid, what’s left is the pre-tax margin.

How do taxes impact profit margins?

Like all retailers, grocery stores pay both state sales tax and they pay payroll taxes for their employees.

45 states plus Washington DC have a state sales tax. Sales tax is sometimes paid monthly, quarterly or maybe even annually depending on state law and sales volume for the company.

Payroll taxes are mandated on the Federal level. But they too could be due daily, weekly, monthly, or quarterly depending on the amount of money due.

Once a company has paid taxes, what they’re left with at the bottom line is called the net profit margin.

Net profit margins show the company’s profitability after every other expense has been paid, really showcasing the profitability of the company. This is why net profit margins are so commonly used and important.

Whole Foods Market, where I worked as a leader for 2+ decades was fond of doing things differently than many other companies.

So with them, we really only focused on gross profit and net profit. And for them, net profit was where ALL expenses, from marketing, labor, rent, utilities, etc were all deducted from the gross to give us a bottom-line profit.

Why Profit Margins Are Important

Why are profit margins so important? If a company is making money, it shouldn’t really matter, right? Actually, no.

Profit margins are very important because they are indicators of important aspects of a company, like growth potential, management skill, and (of course) financial health.

Profit margins are used by not only businesses themselves, but they’re also used by investors and creditors, which are extremely important in business. Investors and creditors may use the profit margins of a business in order to decide whether to invest in it or lend to it.

Ultimately, though, if a store generates a lot of sales, but can’t manage to have a bottom-line profit that is a positive number, they will eventually go out of business unless that can turn that around.

If a store goes out of business, it doesn’t just affect the owner either as every business has multiple stakeholders or people who are impacted by the decisions being made by the owner. Here are all the people that could be affected if a store closed:

  • Employees – Who would have to find other employment. In this interim, they will be forced to slow or stop spending on their personal needs altogether, affecting other retailers in the process
  • Customers – Who will have to find another grocery store to shop at. If the new store is further away, that’s less convenient, can use more gas in their car, and could cut into their time spent shopping in other stores, again affecting other retailers
  • Product Vendors – The people who sold their products to the store will clearly feel the hit as their sales will go down unless they find other markets to sell to. Depending on how busy the store was that closed, or if we’re talking multiple locations, the vendor may have to lay off employees of their own

So as you can see, poor decisions by the owner of a grocery store can negatively trickle down and affect dozens, if not hundreds of other people.

Why Are Grocery Store Profit Margins So Low?

We briefly described this at the beginning of the article, but grocery stores actually have a very low profit margin.

When you look at successful big grocery store chains and companies like Kroger, Publix and Albertson’s, you probably can’t help but wonder how they’re so successful if they have low profit margins.

Let’s take a look at that.

Conventional grocery store chains have an average profit margin of about 2.2%. This means that for every dollar of sale a grocery store has, they make 2.2 cents of profit.

The main reason grocery profit margins are so low, especially for conventional grocery stores is competition.

There are 38,307 grocery stores in the US according to Statistica. That’s literally 1 store for every 5,459 adults over age 18. Now to be fair, 5,459 sounds like a lot, but it really isn’t when you consider a lot of us just shop once per week.

Now we’re talking only 779 people per day in a store. If that store opens at 8 am and closes at 10 pm, that’s only about 55 people per hour shopping; relatively small.

So with all those stores, and people being more price-conscious than ever and the ability to see many store’s prices and specials on their smartphones, grocery stores have to be way more competitive now than ever before.

Because of those low margins, grocery stores are still considered one of the least profitable industries in the United States due to their low profit margins.

It’s not uncommon at all for grocery stores to have a low profit margin and to make a profit of cents or less on the dollar.

However, grocery stores can be and are still successful despite lower profit margins. So if you’ve ever wondered whether owning your own grocery store is profitable, it can be! I have a recent article which breaks that down. I even cover start-up costs and everything you need to understand to get going.

Just click the link to read it on my site.

How Grocery Stores Can Still be Successful With Slim Profit Margins

Grocery stores have a slim profit margin.

So, how can they still be successful and make money? The key comes down to several factors, like volume, and being able to spread administrative and corporate expenses across multiple stores.

Sales Volume and Labor Costs

Larger grocery stores like Kroger or Albertson’s can have a smaller profit margin than small “mom and pop” grocery stores, a local market or a company like Whole Foods.

The reason for that is two-fold:

  • They have hundreds of stores to share corporate administrative costs across
  • Many of those stores do upwards or over a million dollars a week in sales, so even 2% can be a large amount of money at that volume

Whole Foods, by comparison, is not a small company really. That’s even truer since Amazon bought them. But they actually only have 500 stores currently (there were only 5 when I started with them). By comparison, Kroger has 2,800 stores.

The other key difference, and why Whole Foods profit margins tend to be a lot higher is service.

You can walk into a Whole Foods and maybe talk to a wine person who might actually be a real sommelier. Or you can talk to a butcher. You can also go to the nutrition area and get a detailed plan on how to get started on a master cleanse.

In Kroger or most conventional grocery stores, you’re lucky to find anyone to talk to aside from the cashiers. Conventional grocery chains can operate on lower margins because they typically use significantly less labor.

And it makes sense. How much customer service do you really need to buy Cheetos and Folgers coffee?

So smaller companies or natural and gourmet shops with a heavier focus on customer service have to operate on high profit margins to survive and to cover their increased labor costs.

What they typically sacrifice in doing that is sales volume.

Final Thoughts

In this article, we took an in-depth look into the world of grocery stores.

We examine how they price their products and how they make their money. But we also explored how a small mom and pop shop or a gourmet market or organic supermarket might have different margins than the mainstream convention grocery stores.

Ultimately we answered the question what is the profit margin for grocery stores.

Can You Fire an Employee for Gossiping?

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When you work in a place with a lot of other people, gossip is a natural by-product of that. While sometimes harmless, many wonder can you fire an employee for gossiping?

In at-will states, employers can fire anyone for any reason. But even in other states, gossip can be considered “creating a hostile work environment” and can lead to disciplinary action eventually leading to termination.

But there’s a lot more to know about gossip in the workplace and what, exactly, is an “at-will” state. So, in this article, we’ve got all the facts on gossip.

We’ll walk you through the reasons you can fire an employee for gossiping, why gossiping is so detrimental to the workplace, and how to solve a gossiping problem among employees.

Let’s talk about it (no gossiping involved)!

What exactly is gossiping?

Gossip can be anything from rumors to truth, to outright lies. Even if it’s true (like maybe your supervisor did have too much to drink at the company party), it’s still mean-spirited and not appropriate in the workplace.

In most cases, these things are spread behind the back of the person(s) the gossip is about.

It’s, unfortunately, an all too common occurrence in the workplace.

While sometimes it’s just intended to be funny (“did you see who so-and-so brought to the company party??”), it’s often mean-spirited. Sometimes it gets downright nasty and is intended to malign someone or even derail their career options.

I still recall a situation at one of the Whole Foods stores I used to work at in downtown Austin.

I had stopped working there in early September 2005.  About 6 weeks later, at a friend’s birthday party, I met the woman who would later become my wife (and still is). While she had worked at the store when I was there, she was one of the 650-ish employees in that store.

So in truth, while I had seen her, I didn’t even know her name when we officially met.

But a few people, really 1 in particular, decided that my girlfriend (now wife) was somehow doing well at work because of her association with me. She gossipped from one side of the store to the other, despite the fact that I didn’t even work there anymore and had no direct conversation with any of the leadership in that store (about her or anything else).

It was mean, distracting, and ultimately put my wife in the position of having to work extra hard to prove herself instead of just working.

Gossip is damaging to morale, takes its toll on productivity, and can be incredibly demoralizing to otherwise great employees.

Can I get fired for spreading rumors?

Gossip may seem like a small thing, but when it comes to the workplace, gossip can actually end careers.

Let’s take a look at if employers can fire employees for gossiping, why gossiping can be so detrimental to the workplace and reasons why employers may consider firing an employee for gossiping.

Because gossip has had so many detrimental effects both on people and the workplace as a whole, many employers have wondered if you can actually fire an employee for gossiping.

As it turns out, you can get fired for gossiping.

When we break it down, a lot of states and employers are what we call “at-will.” This means that employers can fire employees at will for any reason or for no reason, and with or even without notice.

So, when an employer is considering terminating an employee for gossiping if the employer is an “at-will” employer or is in an “at-will” state, they are within their rights to fire the gossiping employee.

Even if employers aren’t in an “at-will” state and even if they aren’t an “at-will” employer, they still may be within their rights to terminate an employee for gossiping. This is because of the detrimental and negative effects gossiping can have on the workplace and on employees in general.

Gossip is just one of several types of behaviors or actions that are the sign of a negative or bad attitude.

Reasons It’s Acceptable to Fire an Employee for Gossiping

It’s clearly acceptable to fire an employee for gossiping if an employer is an “at-will” employer or if an employer is in an “at-will” state.

However, there are more reasons why it may be acceptable to terminate an employee for gossiping.

First, gossiping can cause friction in the workplace. Friction in the workplace is, at its most basic, a disruption of everyone’s work.

It can be a verbal conflict, just a disruption, or even turn violent.

When these things arise, employers need to shut it down quickly. While that doesn’t usually mean firing someone without warning. It can lead to immediate dismissal if the gossip is severe, And it can lead to disciplinary action that eventually leads to being fired.

Gossiping in the workplace has a negative effect on morale and productivity.

And those are two things that are absolutely necessary for a business to run well. When gossip makes employee morale and productivity go down, an employer can decide to fire the employee causing it.

Lastly, gossiping can create a hostile work environment.

A hostile work environment is something that’s considered unacceptable for employers and supervisors. And if an employee is engaging in gossip that creates a hostile work environment, the employer can choose to fire them to dissolve the hostile work environment situation.

Why Gossiping is So Bad in the Workplace

Gossip has many detrimental effects on the workplace, even if it seems like something small that can’t affect anyone.

Okay, so what are some of the effects of gossip in the workplace? Why is it so negative in the workplace?

Let’s look at some of the main reasons:

1. Gossiping Breaks Down Trust

When gossiping happens, especially when it’s about things that aren’t confirmed (which it most often is), it breaks down the trust level among employees and employers.

When employees know other employees are gossiping, which often happens, it breaks down their trust of the other employees. It may also break down the trust between that employee and all the other employees involved in the gossip.

2. Gossip Can Be the Death of Teamwork

Trust among employees goes hand in hand with teamwork – and when employees don’t trust their coworkers, it’s harder for teamwork to happen.

Teamwork is a huge component that plays into the success of every business. Employees are more often than not part of a team, or the business itself is a team.

When employees and employers can’t work together, teamwork dissolves – and other bad consequences can follow.

3. Gossip Causes Conflict

When it comes down to it, gossip overall causes conflict. Sure, conflict in business and among employees can happen for a number of reasons.

The difference is, the conflict caused by gossip can snowball and affect every employee involved. Employees who have gossiped or been the victim of gossip can engage in conflict, and that conflict can turn into a hostile work environment – especially if the problem isn’t resolved.

4. Gossip Results in More Spending on Supervisors’ and Employers’ Time

Supervisors and employers have enough to do and handle as it is, but when gossip is involved, more of their time can be spent trying to resolve it.

The time supervisors and employers have to spend resolving issues with gossip could be better spent in other areas, like productivity and company morale.

Gossip and the problems it causes can also affect supervisors themselves. If supervisors have someone in a position higher than them, the supervisors may have to take the fall for any performance or morale issues their teams are experiencing due to gossip.

As you can see, gossip really affects every part of a business and everyone involved.

A bad attitude in an employee, while sometimes fixable, is usually something ingrained in them and unrelated to the job. In many cases, it’s virtually impossible for an employer to “fix” a bad attitude.

I go into a great amount of detail in a recent article about how to fire an employee with a bad attitude. There’s a right way to do that and a wrong way. The wrong way can lead to unemployment hearings and even poor morale among the remaining employees.

So definitely check that out as it’s something every employer will face eventually. Just click the link to read it on my site.

How to Get Rid of Workplace Gossip

Workplace gossip clearly comes with negative consequences. Sometimes those consequences are employees being fired.

However, it doesn’t always need to come to that.

There are some tips employers and employees can take to lessen and even get rid of workplace gossip so otherwise good employees don’t have to lose their jobs.

Let’s discuss those tips:

Enact a Zero Tolerance Policy

Employers can protect their businesses from the effects of gossip (including firing an employee) if they enact a zero-tolerance policy.

Zero tolerance policies show employees there are severe consequences if they participate in the activity with zero tolerance – and can prevent them from gossiping in the first place.

Encourage Positive Gossip

Wait, positive gossip? That’s right!

Gossip doesn’t always have to be negative. Employers and supervisors can encourage positive gossip among employees, which can lessen the effects of normal or negative gossip.

Positive gossip entails employees, employers and supervisors thinking of the great things they have done, like going out of their way to help a customer, getting a great sale, or anything that really positively affects the company.

Then, employees, employers, and supervisors can share those great things among others to start a chain of positive “gossip” with none of the bad consequences of normal or negative gossip.

Ignore the Gossiper

You may have heard the advice that when it comes to bullies if you ignore them and don’t give them a reaction, they’ll stop bullying.

The same can actually be true with gossipers. Gossipers often thrive on the attention and recognition they get from starting and participating in gossip.

Sometimes they spread negative things about others to make them feel better about themselves. Or they think it somehow makes others think more highly about them. (hint: it doesn’t)

If no reaction is given to the one who starts or engages in gossip, they’re very likely to stop.

Nothing is in it for them anymore! Ignoring the gossiper(s) is a great way to lessen and prevent gossip in the workplace as a whole.

Of course, employers shouldn’t ignore gossipers. As leaders, it’s our job to keep the peace and protect our employees. As employers get wind of gossip or otherwise negative behavior, we have an obligation to step in quickly, consistently, and firmly.

Final Thoughts

In this article, we took a look at the workplace environment and something everyone has unfortunately dealt with; gossip.

We looked at why it’s so bad for the environment in your store or company. But we also explored some solutions you can implement to possibly avoid having to fire anyone.

After all, it’s much easier to keep an otherwise good employee than it is to fire them and hire and train a new one. Specifically, though, we answered the question can you fire an employee for gossiping with the answer yes.

Is Owning a Grocery Store Profitable? (Not always Here’s why)

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As a store manager for years, I someday dreamed of opening my own store. But I always wondered, is owning a grocery store profitable?

Conventional grocery stores make 1-2% bottom-line profit, but stores like Whole Foods Market may generate 5-12% profit. However, for small independent grocery stores, 1 to 4% is more typical. There are also a lot of factors that affect independent owners more, such as marketing, product costs, and shrink.

But, there’s a lot more to know about independent grocery stores, start-up costs, margins, markups, and profit.

After all, while I ran million-dollar stores for Whole Foods Market for well over a decade, having that corporate support behind me gave me a level of support that’s just not there for small independent grocery store owners.

Large chains benefit from having the buying power of hundreds of stores behind them. That gets them quantity discounts on purchases that the mom-and-pop owners just can’t get. Smaller operations also have increased marketing costs since they are promoting generally 1 store instead of dozens or hundreds.

So in this article, we’re exploring everything there is to know about grocery stores and whether or not starting your own is a good idea. Specifically, we’re exploring is owning a grocery store profitable.

Let’s get going!

What is the typical profit margin for a grocery store?

First, let’s define the terms so we’re both talking about the same thing.

Gross profit is simply what you sold an item for minus what you paid for it.  If you sold a can of beans for $1.00 and bought it for 60 cents, you made 40 cents gross profit.  Net profit deducts a number of other expenses.

For instance if, in that case of 12 cans of beans, one was dented and couldn’t be sold, unless you can get the vendor who sold you that to give you credit, that’s your loss. You report that as what’s called shrink or spoilage.

Deduct all the expenses associated with selling that can of beans and you’re left with the net profit or the bottom line.

Next, we have to recognize there’s a difference between Safeway, Albertsons, or Kroger (depending on which part of the country you live in) compared to a Whole Foods, Wegmans, Sprouts, or Dean and Deluca.

The typical “conventional” grocery stores operate on lower profit margins.

The reason for that is simple; they want to sell more items for a lower price. Those types of stores don’t have as many employees walking the aisles handing out free samples or giving cooking tips. And those grocers also don’t usually have a butcher in-house who can trim up that brisket for you either.

So they can get by on fewer employees and lower profit margins. Generally speaking, these types of mainstream grocery stores can get by on 1 to 2 percentage profit margins. In other words, 1 or 2% of the total store’s sales would be profit.

If the average Safeway does $1,000,000 per week, that means $20,000/week profit per week, max, or $80,000/month and a little over a million dollars profit per year.

Whole Foods, on the other hand, where I spent more than 20 years of my life, typically (and this is before Amazon bought them) might operate as low as about 5% for a larger more complex store like the company flagship I opened in downtown Austin.

But smaller, more straightforward stores might be closer to 10-12% bottom-line profit margins.

Bottom-line profit is after all expenses including wages, taxes & insurance, and all other costs associated with running the store are taken out.

What is the average markup in a grocery store?

Margin is what percentage of the sales price your profit is, whereas markup is what percentage of your cost the profit is. Basically 2 sides of the same coin. Different, but related.

Also, understand that different departments in a grocery store mark things up differently.

I go into much greater detail about the differences between margin & markup and how to calculate both in a recent article. Don’t worry, I explain exactly how a 15% markup is only a 13% margin. Just click the link to read it on my site.

It’s also important to think about how products get into your shopping cart and how much that might be marked up every step of the way. First, there’s a manufacturer who made the product. They make the product and allow a distributor, sometimes called a wholesaler, to sell their product for them for a cut.

The distributor, essentially the middle man between the company who made the item and the grocery store selling it, marks up the product about 15% before selling it to the grocery store.

The grocery store then marks up, on average, about 12% (10.5% profit).

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How different departments mark up differently

As I mentioned, different departments mark up differently in a store. There are 3 main factors which impact why a department might mark up higher or lower compared to another:

  • Labor costs 
  • To be competitive on price 
  • Shrink

In other words, a full-service food operation like you see in Whole Foods, with a sandwich station, pizza oven, hot and cold bars spends a lot of money on paying all the employees who work there. They also throw away a lot of food at the end of the night, so they have high labor and high shrink.

Generally, a department like that might use 100% markup (50% profit) to help cover all those costs.

Then in a category like general merchandise (toilet paper, charcoal, pet food, etc), especially if there’s a Wal-Mart or Dollar General down the street, they may use much lower markups. After all, those products get damaged less, expire less, and generally have much lower shrink and labor costs.

So they might only mark up 10-20% (again depending on whether you’re talking about a Whole Foods or a Safeway).

Some of those figures are courtest of Integra Systems, Inc. while others are from my own knowledge of the industry.

How much does it cost to start a grocery store?

There are, of course, a lot of little costs associated with starting a grocery store.

But generally speaking, you can expect to spend upwards of $500,000 to open a small to medium-sized grocery store.

The big expenses would be:

  • Rent or mortgage
  • Attorney fees (for everything from leases, permits, etc)
  • Taxes (both sales and payroll)
  • Insurance
  • Refrigeration equipment
  • Cash registers/POS systems and software
  • Shopping carts
  • Equipment (hand-trucks, forklift, pallet jack, etc)
  • Shelving (both retail and in your back room)
  • Labor costs (wages, including your own)
  • The wholesale cost of the products you sell

Some of these are obviously recurring monthly fees and others are larger one-time expenses.

Much of the above expenses will also have to be spent before you even open your doors. So you need to have enough working capital (money in the bank) to pay these expenses before you start making any money.

From a tax standpoint, the larger one-time expenses might get depreciated over the life of the product.

In other words, if you buy $6,000 of grocery carts (1 cart can easily cost $150), those will hopefully last you 7 years or more. So from a business expense tax write off standpoint, you’d deduct an equal portion of that on your taxes each year over 7 years.

How do you calculate grocery store profit?

This part is easy. You start with your sales at the top and then subtract out all your expenses below that.

Some companies might call this a P&L (profit and loss statement). Whole Foods, fond of making up its own names for everything, called this a margin report.

What’s left at the bottom is your net profit (or loss); your bottom line.

Here’s an example of the types of expenses that might get subtracted from your gross sales:

 OCCUPANCY EXPENSES  SALARIES & BENEFITS  OTHER EXPENSES
 Rent  Salaries  Supplies
 Repairs & Maintenance  Payroll Tax  Cost of Goods Sold
 Security  Insurance  Marketing
 Property Tax  Benefits  Bank Charges
 Utilities  Employee Expenses  Utilities
 Property Insurance    Depreciation, Amortization

Just subtract all those (and any other) expenses you have from your total sales and that’s your gross profit. Many companies go off of a “fiscal period” rather than a calendar month.

This is because a fiscal period is exactly 4 weeks, whereas a month is sometimes 28 days and other times 31 days, making it hard to compare apples to apples.

So decide if you want to track your P&L monthly or by fiscal period.

If you use a fiscal period method, you will end up with 13 periods per calendar year. But no matter what method you choose, be consistent, and follow that system each and every time you calculate your profit and loss.

How much does a grocery store owner make?

I can tell you as a salaried Store Team Leader for Whole Foods Market, I typically made in the low 6 figures annually. I got paid an hourly wage (but was salaried and did not clock in) plus I got a quarterly bonus.

Whole Foods currently lists $99,000 as the average annual salary for it’s Store Team Leaders. But unless things have changed a lot with Amazon, that sounds low and probably isn’t including any bonus.

However, an independent grocery store owner’s pay can fluctuate quite a bit more than a corporate lackey such as myself.

After all, as the sole owner, there’s no corporation to back you up and if your store isn’t profitable for 1 or more fiscal periods, there aren’t hundreds of other stores making a profit to balance that out like there are with corporations.

Done right though, your earning potential could be multiple hundreds of thousands of dollars per year; maybe as high as $300,000/year.

But there’s a lot that goes into being able to make that kind of money. Things like the following can impact that dramatically:

  • Location
  • Competition
  • Your ability to build a loyal tribe
  • How well you treat your employees (who then serve your customers)

Interestingly, there’s 1 business model that’s a hybrid of being a solopreneur and just another faceless employee for a large corporation.

That’s with a franchise.

A franchise such as the one offered by Grocery Outlet Bargain Market gives owner-operators the freedom and flexibility to run their own stores and keep a decent chunk of the profits while also giving them a certain level of corporate security and systemization.

I have a recent article that breaks down their program and whether or not it’s worth it. I go into everything from earning potential to how they split profits, including the 1 thing that would probably prevent me from wanting to do it.

But they do have some owner-operators making $300k/year, so for some, it’s a great opportunity.

Final Thoughts

In this article, we took a look at the world of starting a grocery store and how profitable that might be.

We examined how grocery stores mark up products and what kind of bottom line profits are typical. We examined start-up expenses, typical costs, and even what expenses would typically show up on a P&L statement. And how unexpected things like a power outage might affect your perishable items if you don’t have a backup generator.

Ultimately, we answered the question of Is owning a grocery store profitable?

What Are the Different Positions in a Supermarket?

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Whether you’re a grocery store owner just getting started, or a prospective employee, it’s a pretty common question to wonder what are the different positions in a supermarket or small grocery store.

Supermarkets have a variety of positions including:

  • Stock clerks
  • Cashiers
  • Baggers
  • Meat cutters
  • Wine experts
  • Shipping and receiving clerks
  • Support staff such as IT and HR
  • A department manager for 1 or more departments
  • A store manager and assistant store managers

But there’s more to know about grocery store workers, positions, and who does what.

After all, there’s a huge difference between a corner market and one of the Whole Foods stores in Manhattan. So one size does not fit all when it comes to mapping out positions in a grocery store.

So let’s get going and we’ll cover it all.

What departments are in a grocery store?

A typical large supermarket will have different departments, such as:

  • Grocery (canned & boxed non-refrigerated items: usually the biggest part of the store)
  • Frozen Foods
  • Meat
  • Seafood (sometimes combined with meat)
  • Produce (fresh vegetables and fruit)
  • Deli (can be just sliced meats and cheeses or a full-blown counter-service deli selling food to go)
  • Dairy (milk, eggs, yogurt)
  • Beer & Wine
  • Health and Beauty (everything from vitamins to makeup)
  • Front End (where the cash registers are where you check out)

Of course, every chain of stores does things a little differently.

At Whole Foods, where I worked for many years, Deli was almost like a full-blown restaurant with hot and cold food bars, grab-and-go cases of prepared foods, and oftentimes also including pizza ovens, made-to-order sandwich stations and more.

Then Whole Foods also had a department called Specialty which included cheese, beer, wine, and high-end charcuterie (fancy sliced meats like prosciutto).

Some stores also break out a section called General Merchandise from regular grocery.

This is typically dry goods, but non-foods. Items like charcoal, pet food, paper products would typically fall into this category.

Some stores might also have a department of graphic artists doing printed signs or chalkboards, but larger chain stores probably do the majority of that work at a regional office and just have the local stores print out what they need.

As you can imagine, all the departments in a grocery store vary a lot from company to company. A small mom and pop store about the size of a convenience store (about 9,000 square feet) will have very different needs from a large chain store (anywhere from 40,000 to 80,000 square feet).

What positions are in a grocery store?

In each of these departments except Front End, depending on the size of the store and the sales volume it does each week, you might find the following positions:

  • Department Manager (usually 1)
  • Assistant Department Manager (usually 1)
  • Product Buyer/Orderer (1 or more depending on the size of the department)
  • Stock clerks (anywhere from 3-10 or more per department)

The Front End mostly consists of cashiers and baggers in addition to the department manager and assistant manager.

Then on a more store-wide level, there would be support positions such as:

  • HR (usually 1) – Responsible for payroll support, hiring, firing, disciplinary matters
  • Receiving (the person responsible for receiving the delivery trucks and sending the products to the departments to be stocked) – this could be 1 person or multiple depending on the size of the store
  • IT – Larger, more complicated stores would have an IT person responsible for price accuracy for the printed price shelf tags, maintaining the computers, point of sale software the cash registers use, and any electronic scales that weigh and print prices
  • Custodians – Stores may have 1 or more employees who just clean, sweep, mop up spills, and empty trash cans. Typically grocery stores use a floor cleaning service who are contracted out to clean, shine, and polish the floors 1 or more nights each week

Also, some stores are small. The Whole Foods Market store in San Francisco I ran for 3 years (called the Franklin store), was only 28,000 square feet. BUT, it did almost a million dollars in sales each week. That was well over a decade ago too, so you can only imagine what the sales are today.

My point is that doing that kind of sales volume from a relatively small space has different needs and challenges from a larger store doing less volume.

What skills do you need to work in a supermarket?

As a General Manager at Whole Foods Market, I always repeated the mantra “hire for attitude, train for skill”.

By that I mean, I can train anyone to do almost any job in the store.

Some jobs will require more training than others. And some jobs might require certifications (like perhaps HR or forklift driving for the receiver). But in most cases, I can train anyone to stock groceries, cashier, or help customers.

What I CAN’T do is train people to have a good attitude.

If someone is naturally argumentative or has a chip on their shoulder about something from their past, there’s only so much I, as a general manager, can do to help them.

In other cases, sometimes just see themselves as a victim of life, and are constantly creating situations to justify those feelings. I can tell these people to be nice, smile, not argue with everyone, or not make their co-workers uncomfortable.

But at the end of the day, all I can really do is make expectations clear, and hold them accountable when they fail to meet the expectations.

I have a recent article which goes into great detail about employees with negative attitudes and the best ways for managers to deal with them. So check that out to see the steps involved that might ultimately lead to them getting fired.

So the best skills to have to work in a grocery store are:

  • A positive attitude
  • Show up on time
  • Only call out sick on very rare occasions when you are really sick
  • Being flexible on what days and hours you can work
  • The willingness to do any job that is needed even if it’s not “technically” part of your job description

If you bring those things to the job, I can train you on anything else and you’ll be an outstanding employee.

Grocery store job descriptions

As I got into above, every grocery store is a little different.

Some are huge, like the downtown Whole Foods Market I opened as a General Manager. That store opened in March of 2005 and we had over 650 employees and it did well over $1,000,000 each week right from the very beginning. It was also 86,000 square feet, making it quite large (especially for Whole Foods).

But other stores are small and don’t do anywhere near that volume in sales.

So as we discussed above, positions will vary a lot between stores and companies. Nationwide chain stores might do a lot of things (HR, pricing, signs, and ordering) in regional or national offices. Whereas small independent grocery stores do EVERYTHING in-house, often with the owner wearing many different hats.

BUT, having said all that, a cashier is a cashier, and a stocker is a stocker. And no matter the size of the store or the sales volume, the requirements for those jobs don’t really change that much.

The typical minimum expectations for anyone working in a grocery store would include:

  • Able to lift 50 pounds
  • In an 8-hour workday: stand or walk between 6-8 hours
  • The ability to work in a wet and/or cold environment
  • Flexible schedule including working nights, weekends, and holidays as needed
  • The ability to use tools and equipment, such as box cutters, electric pallet jacks, and other machinery

Of course, each department will have specific job descriptions for each position, and the duties of a meat cutter will be very different from a bagger.

But the above is the typical minimum expectation for anyone working in a grocery store.

What is the job description of a grocery clerk?

A grocery clerk is the lifeblood of the store.

These people stock the shelves with product and fill it back up when it sells. They also keep the store looking good throughout the day doing what’s called “facing” or “fronting”.

Facing or fronting is simply pulling products from the back of a shelf to the front as products get purchased.

Depending on how busy the store is, this may be done at 1 designated time, or on a more ongoing basis throughout the day. Stores that focus mostly on value and low prices often have fewer grocery clerks working and may not do this at all.

But I can tell you the fuller and more presentable the shelves look, the more people are inclined to buy. If your store routinely looks like it just got ravaged in the face of a coming hurricane, you will sell less because it looks unappealing to people.

It’s not a conscious choice, but more of an instinctive reaction on the part of the customer.

Grocery clerks also provide the bulk of the customer service outside of the check stands. They direct people to products and offer product suggestions and maybe even cooking tips.

Whole Foods, of course, tends to focus heavily on customer service, whereas some grocery chains just hire grocery clerks based on how fast they can stock shelves.

The best stores balance those 2 skills.

Do cashiers have to stand all day and have to bag groceries?

Yes is the short answer.

Cashiers would typically stand at the register for 6-8 hours and bag groceries. Cashiers would also typically be expected to go out into the parking lot occasionally and collect grocery carts and bring them back to the front.

But having said that, the Equal Employment Opportunity laws do provide employment protection for workers who fall into what are called “protected classes”. Legally protected classes are:

  • Race
  • Religion
  • Color
  • National origin
  • People over 40
  • People with physical or mental handicaps

Being in a protected class just means employers can’t discriminate against an employee or candidate based on those criteria. Eventually, I would think sexual orientation would be added to that list, but it’s not currently there.

Now that doesn’t mean a store can’t refuse to hire someone completely physically unable to do a job. But they do have to provide what’s called “reasonable accommodation”.

What is reasonable accommodation?

Of course, what is “reasonable” is where the challenge comes in for grocery stores since that word can mean many different things to different people.

For a cashier with plantar fasciitis, a reasonable accommodation might be to allow them to cashier sitting on a stool. But it could also be seen as “reasonable” to ask them to bring a doctor’s note of what their physical restrictions actually are.

However, if someone applying for a cashier position has carpal tunnel syndrome, there may not be a “reasonable accommodation” for that job since it does involve using the hands and fingers all day long. But perhaps a different department in the store could provide that accommodation.

I still recall an employee in San Francisco that insisted her headscarf was part of her religion and that she needed to be allowed to wear it. But California, in general, tends to go a little extreme in a number of ways.

Whole Foods typically requires all hats to be branded Whole Foods items so it’s clear the person is an employee.

In the end, we decided that allowing her to wear it, however bogus I thought her claim was about it being her religion, was “reasonable”.

Basically, pick your battles, and this one wasn’t worth my time.

What does an assistant store manager do?

An Assistant Store Manager, what Whole Foods called an Associate Store Team Leader, is basically a store manager in training.

They back up the store/general manager on decisions and bring hot button issues to the attention of the store manager. The assistant store manager might work more nights and weekends than the store manager.

But a good store manager will at least do 1 night each week and 1 weekend day each week.

Those are often the busiest times, so it’s important for anyone in a leadership role in a grocery store to not lose touch with those employees, customers, and overall flow of the business.

An ideal assistant store manager is someone who is on the path to become a store manager. But having said that, I do know several career assistant store managers who seem to be happy in that support role.

When I was an assistant store manager, I saw my role as:

  • To make my boss’s job easier
  • Deal with situations directly rather than running everything through the GM (which can be exhausting for them)
  • Only run the really important stuff by the GM
  • To ensure that all departments have the people and tools they need to serve the customers to the best of our ability
  • Ensure that all the employees are happy and feel supported (a happier employee will give significantly better customer service)
  • To be a floor captain rather than a desk jockey (be on the sales floor feeling the pulse of the customers and employees)
  • To be the direct supervisor to the department managers

What does a store manager do?

A store manager sometimes called a General Manager, or at Whole Foods, a Store Team Leader is the main person in charge of the store.

For a chain grocery store, there are obviously district or regional managers, and people with titles like Regional President or Vice President. So the GM isn’t truly 100% in charge unless it’s a single-owner store. But they are in charge of the store on a day to day basis and responsible for all aspects of running the store including:

  • Scheduling of administrative staff
  • Hiring, firing, and disciplinary measures (doing themselves or ensuring another leader is following proper protocol)
  • Being responsible for keeping labor costs in line with targets
  • Ensuring the department managers are running their departments well
  • Keeping up the cleanliness and visual appeal of the store (not doing all the work, but ensuring it gets done)
  • Making sure all equipment is in good working condition (both for safety and employee happiness)
  • Walking the store daily (ideally at opening) to ensure the store is at the highest standard for the customers
  • Being responsible for profit and loss store-wide

As a Store Team Leader at Whole Foods, I really saw my job as making sure I hired the best people, gave clear expectations, ensured they had all the tools and training they needed and then got out of the way so they could do those things in their own way.

Store managers who insist on micromanaging the whole process often either fail or end up working 100 hours a week trying to get it all done. You also typically see much lower morale in a store where the team feels micromanaged or that the boss doesn’t trust them to their job without constant supervision.

Final Thoughts

In this article, we took a look at the typical positions in a grocery store.

We broke it down by department and explored the key differences between a small corner market and a large full-service supermarket.

Ultimately, we answered the question of what are the different positions in a supermarket?

How to Calculate Markup and Margin for Retail

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Trying to figure out how much to price a product and how much profit you can make when you sell it is tricky. But after 20+ years in retail grocery, here’s what I’ve learned about how to calculate markup and margin for retail:

Margin is the percentage of your sales price that is profit. Markup is the percentage of the profit that is your cost. To calculate markup subtract your product cost from your selling price. Then divide that net profit by the cost. To calculate margin, divide your product cost by the retail price.

But there’s a lot more to know about markups and margin. You’ll want an easy way to calculate both on the fly, and you’ll want to understand both the difference, but also how they relate to each other.

So in this article, we’re taking the mystery out of it. We’re also steering clear of talking like your accountant. That way you can understand in plain English exactly what you need to do; simply and easily.

Let’s get going!

What is a retail markup?

Let’s say you buy a product from a warehouse for $1.00. That’s called your wholesale cost.

Whatever price you decide to sell it at is called your retail price. How much more your retail price is compared to your cost is considered your markup. Usually, this is shown as a percentage.

So markup, broken down as simply as I can state it, is what percentage of the profit your cost is. If something costs a buck and you sell it for 2 bucks then you have 1 dollar of profit. Since both your cost and your profit are 1 dollar, that’s a 100% markup.

In other words, you simply doubled your cost to come up with your retail sales price.

What is a retail margin?

Margin, while similar and related to markup, is altogether different.

If markup is the percentage the profit is of the cost, margin is what percentage of the sales price the profit is. So in a way, it’s the same thing in reverse.

Let me explain. No, there is no time. Let me sum up. (sorry, old guy Princess Bride reference).

Again if you buy something for 1 dollar and sell it for 2 dollars, we know that’s a 100% markup. But for margin, since we marked up the price by 1 dollar, and we sell it for 2 dollars, the profit (1 dollar) represents exactly half of what we’re selling it for. Or a 50% margin.

Most retailers would LOVE to make a 50% margin, so just know that I used simple numbers to make the math easier.

In many cases in a grocery store or other retail environment, you’re likely not seeing margins that high.

What’s the difference between markup and margin

As I just explained above, markup is what percentage of your cost the profit is.

By comparison, margin is what percentage of the sales price your profit is. So they are related and are all based on the same set of numbers. But they are both different (but important).

Here’s a handy chart to help explain the difference and show some examples:

Markup Margin
15% 13%
20% 16.7%
25% 20%
30% 23%
33.3% 25%
40% 28.6%
43% 30%
50% 33%
75% 42.9%
100% 50%

Some people say “sales cure all”.

What they mean by that is if you can find ways to drive an increase in sales, a lot of your problems go away. Where that saying falls a little short or perhaps is naive, is that you have to be driving those sales on a solid financial foundation of systems for setting, tracking, and monitoring things like sales, costs, and shrink.

Otherwise, you’re likely going to find you grow your problems too.

How do you calculate retail markup?

So again, in our example, you buy something for $1.00 and let’s say you sell it for $2.50. That means you marked it up $1.50 from what you paid for it.

That $1.50 we made on top of our cost is called the gross profit.

It’s called “gross” profit because there are expenses involved in running a store that gets subtracted before you know the bottom line. The bottom line profit, after expenses are deducted is called the net profit (more on that below).

As I mentioned, typically markup is shown as a percentage. The percentage of markup represents what percentage of the profit your cost is.

So to calculate the percentage we want to see the profit divided by the cost.

To make it really simple, using our examples, we’ll divide the gross profit ($1.50) by the cost ($1.00). Doing that simple math, we get 1.5%. To look at that math backward, you would simply multiply 1.5 times your cost to figure out what you want to sell the item for.

But in this example, you have a 1.5 markup.

So if your retail store is pretty consistent, in what you buy and sell and you mostly sell a lot of the same kinds of items, you can decide what markup might make sense for you, and just use that every time you price your items.

Where it gets more complicated is when your store sells a wide variety of items, such as a deli section, fresh meat or seafood, or vitamins.

Those categories typically have very different markups both because stores have to be competitive on price with other stores, but also due to what’s called spoilage. Spoilage is when you buy something and it goes bad before you can sell it. Generally, the more perishable an item (like meat, seafood, produce), the higher the spoilage.

So often the markup takes a certain amount of spoilage into account to ensure the store isn’t losing money.

How do you calculate the selling price and margin?

As noted author Stephen Covey says, “Begin with the end in mind”.

In other words, let’s figure out how much money we need to keep the store running, and then work backward. A typical large grocery store might want a gross profit of about 40%. But also bear in mind that the higher the sales, the lower the profit percentage can be.

By that I mean if your store sells $80,000 in products each week, and you have 25 employees, you could probably sell $100,000 in 1 week before you have to hire additional people. In other words, there isn’t a 1 to 1 correlation between expenses, sales, and profits.

But if we want a 40% gross margin, that means, as we explained above, the margin is what percentage of the retail price is the profit. If we know our product cost (let’s stick with the $1.00 example) and we know we want the profit to be 40% of the selling price,

So now we know the why behind how to figure out what margin to set prices at. Let’s do the math.

Let’s say we know we want our small grocery store to hit a gross profit margin of 40% (which is not uncommon).

That means we want the cost of the products we are buying to not be more than 60% of what we are selling it for.  So if we know we want to sell a product at $2.00 because that’s what the competitors sell it for, then we know we want our cost to be at or under $1.20.

If you can hit those numbers, your gross margin will be at or better than 40%. But let’s look at it in reverse. Let’s say we know it costs 1 dollar. 

How much do we mark it up to get to a 40% margin?

Simply take 100-40 (for the 40% margin). Then express that answer as a decimal (.6%). Now divide your cost ($1.00) by that .6%. The answer is $1.67. That is the retail price you should sell a product for if you bought it for $1.00 and want to make a 40% margin.

Want a different margin? Do the exact same math substituting your target margin where I used the 40.

What’s the difference between gross profit and net profit margin?

Gross profit is simply what you sold something for minus what it costs.

Going back to our 1 dollar example, if we buy for 1 dollar and sell it for 2 bucks, the gross profit is $1.00. Net profit, however, takes other expenses into account. Sometimes people call this “bottom line”.

In other words, if you’re running a small grocery store, you not only have to pay for the product, but you also have other expenses like:

  • Rent
  • Utilities
  • Wages for your employees
  • Insurance
  • Marketing costs (website, advertising, discounts)
  • Skrink (products that go bad before you sell them and have to be thrown away or donated)

You might think you’re doing great marking something up 25%, but when you get done subtracting all your costs at the end of the month, you might find that your net profit is a negative number.

While we, as retailers don’t want to be greedy and we do want to sell our products at a competitive price, if we can’t keep the doors open, we are ultimately failing not only ourselves but also our employees and the community we serve.

That’s why we have to balance all the needs and come up with a fair price for our products. That’s also why an average grocery store might shoot for a gross margin (gross profit) store-wide, of 40%.

Because once you’re done subtracting all the expenses, you’ll be lucky if that leaves you 6% net profit.

Final Thoughts

In this article, we took a look at the world of profit margin and retail markup.

We explored how the 2 relate, but also what the difference is and how to calculate each one. We examined how the price you set effects the margin. And we broke it all down in plain English; no accounting degree needed!

Ultimately, we answered the question of how to calculate markup and margin for retail.

How to Build a Grocery Display – Merchandising that Sells!

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They might seem simple enough, but great displays can make or break a grocery store. So learning how to build a grocery display is one of the first things successful grocery store managers need to learn.

A great grocery display has 2-3 products that are likely to be purchased together. It needs to look abundant, with contrasting colors and textures between the items. It also needs to have some depth and height to it, but not contain so much product as to tie up too much money or take months to sell through everything.

But there’s a lot more to know about grocery merchandising and displays. So here, we’re getting into the how and why of grocery store merchandising and displays. We’ll talk about how a display needs to look in order to sell product and the psychology behind it you need to be aware of.

Specifically, though, we’re walking through exactly how to build a grocery display.

Let’s get going!

What is a merchandise display?

A merchandise display is any type of display in a retail store in addition to the regular aisles and shelves. That could be any an endcap display, a free-standing display in the middle of the store, displays outside the store near the entrances, or smaller displays near the check stands.

Unlike the regular aisles in your store, these displays are designed to draw special attention.

In many cases, they are temporary displays that change out every few weeks, or perhaps seasonally. So they aren’t intended as year-round displays.

In that sense, this works great for products you buy on a discount.

That way you can build a big display and pass some (or all) of that discount on to the customers in the hopes of doubling or tripling the sales of that product(s) over what you might sell normally.

Do I need a lot of product to build a grocery display?

In some cases, yes. There are ways around having a ton of product and we’ll get more into that below. But displays work best when they at least look abundant.

Think about it this way.

When you go to a store to buy a product, normally the shelf would be full of that product. But sometimes we get there and there’s just 1 left. Often, from a psychological standpoint, we feel unsure about buying it when there’s just one left.

There’s just something inherently wired into our brains to not want to buy something that’s not abundant in quantity. It’s not logical, it’s intuitive. We might feel like it’s old, or it’s the one that no one else wanted.

Displays need to be the same way; it needs to look full of product. Abundant, fresh, and colorful. That also means it will need to be maintained throughout the day and during the entire promotion; it’s not set it and forget it.

How much product do you need to build a display?

Of course, that varies a lot depending on if you are building your display on a fixture, or just stacking cases on the floor. Generally speaking, these days, most smart retailers use fixtures or shelving to build displays.

That way it’s much easier to make a display look abundant without investing a ton of money into product that (in some cases) might take weeks or months to sell. It also makes it much easier to keep the display looking good throughout the promotion.

Here’s a good example of how NOT to build a display.

I took this picture in a Whole Foods store some years back.

There is a theme here (low-carb), but there are soy tortilla chips, 3 different kinds of bread, breakfast cereal, and some sort of (presumably low-carb) cookbook.

It’s a jumbled mess.

Yes, whoever built it probably thought people on a low-carb diet (Atkins was the flavor of the day back then) might want all those items.

But it isn’t cohesive. None of those things really go together and low-carb is the only common denominator.

A more focused approach would have been to have the chips with jars of salsa and maybe fresh avocados from produce. Or have the cereal along with aseptic containers of unsweetened almond milk.

In short, have fewer products that people will naturally want to buy together. Even on a low-carb diet, I may not be looking for 2 different kinds of bread, soy chips, and breakfast cereal.

How many different items should go on 1 display?

A display needs about 2-3 different products in total.  It’s OK to have different flavors of the same item but don’t have more than 3 completely different products on 1 display. 

So why 2-3?

If you only have 1 product, then you are forced to buy a LOT of that product from your distributor. If you misjudged the demand for that 1 product then it can take you a LONG time to sell through it.

Then you find yourself moving the display to different parts of the store so it looks fresh, but every time you touch a product, you lose money.

Let me repeat that; every time you touch a product, you lose money. Ideally, you want to build it, sell it, and then order something new when it’s gone.

But too many products and the display lose focuses and gets junky.

The related part is hugely important too.

Every day in stores I see displays that make NO sense. I see boxes of pasta, not with jars of pasta sauce or bottles of wine or even non-refrigerated containers of parmesan cheese, but things like jarred pickles.

In short, it’s grocers putting up displays of whatever they happen to have the most of in the back room, thinking they are being smart by getting the products out on the floor, but then wondering why 2 weeks later it didn’t sell.

It makes NO sense.

You want to motivate your customers, not through words, but intuitively, to buy everything on your display. If I see a brand of pasta I like, I might buy it if it’s on sale. But I’m VERY unlikely to buy a jar of pickles next to it, no matter how deep the discount it.

I would, however, buy a jar of pasta sauce and a bottle of wine (and if those auxillary products aren’t on sale, it helps your margins!)

How to build a grocery display without a lot of product

Sometimes, either for budget reasons or just quantity on hand, we find ourselves needing to build a display without a ton of product.

So there are a few good tricks to know when you’re wanting to look abundant without actually being abundant.

Sometimes I find this easier building displays with cardboard cases of products.

The reason for that is I can take 8 (cases are often 12 of something) out of a case, leaving 4 to provide structural support. If I have 12 cases of something, doing that method, and free stacking the individual boxes, I can easily make that look like 36 cases, or something close to it.

On a wooden fixture, you could also dedicate a shelf to demo samples of the product or stacks of coupons for the product or other product information or literature your customers might be interested in.

The picture above is a Valentine’s display I took a picture of in an Atlanta Whole Foods in 2005.

It might look like a TON of product. But in actuality, those champagne cases only have 4 bottles each in them and the cases of truffles are empty and all the individual boxes are just stacked loosely on top.

It’s a giant freestanding display that is really made with a fairly small amount of product. It makes a statement without tying up a huge amount of money in inventory.

What are the 4 elements of visual merchandising?

While you will have signs up on your displays, and on some occasions have an employee sampling the products, the display itself needs to tell a story. You tell that story by combining different elements of visual marketing.

Here are the 4 elements of visual marketing:

  1. Color (you must have color breaks to make product delineations clear)
  2. Touch and feel (different packaging provides needed contrast too)
  3. How the products related to each other (they must make sense together)
  4. The size and shape of the display (it deeps depth and height)

Visual merchandising is more than just the products. You have to think not only about what products go good together, but you also have to think about how they look side by side or above or below.

Bananas and blueberries look good together because of the contrast of both color and shape. Red bags of tortilla chips wouldn’t look good with red jars of salsa because of the lack of contrast in the color.

Check out this handy infographic which goes more in-depth into these concepts.

Why do grocery stores rearrange everything?

In short, times change, trends change, products change. Grocery stores (and retailers in general) need to keep up with the times or be left behind.

In the world of non-dairy milk, for instance, in 1990, soy milk was all the rage. I’m guessing that’s now the slowest seller, way behind almond milk and coconut milk.

If stores still had huge displays of soy milk, customers would flee to their competitors.

The other big reason to do what retailers refer to as a reset is to keep things fresh, and yes; to keep customers guessing and (more importantly) walking every aisle rather than cherrypicking down a shopping list.

When customers (like me) cherry-pick specific items and don’t go up and down every aisle, they don’t often run across as many impulse purchases as they would otherwise.

Finding ways to get customers to add unintended items to their purchase builds sales and what’s called basket size (the average amount per shop customers spend).

That’s why grocery stores change stuff around in a major way a couple of times a year.

Final Thoughts

In this article, we took a look at the world of grocery store displays.

We examined why grocery stores have displays. But we also looked at what to do if you don’t have a lot of product or a small budget to order product. We also looked at the psychology behind a good display to see why some sell tons of products while others collect dust.

Ultimately, we broke down EXACTLY how to build a grocery display. That way your store can sell more, help more people, and make your business more successful.

How have you been building your displays?

All pictures taken in Whole Foods were taken by me

How to Fire an Employee With a Bad Attitude

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As a store or department manager, eventually, you have to reprimand or even fire someone. The worst of these situations often lead to us wondering how to fire an employee with a bad attitude.

For employees with a bad attitude, first, address the issue verbally. Then in written form, if no improvement is made. Give them a period of time to correct the behavior and have a follow-up meeting scheduled. If no improvement is made, issue a final warning, with termination being the outcome for no improvement.

But there’s a lot more to know about how to deal with bad attitudes and problem employees.

More importantly, we’ll get into the right and wrongs ways to deal with toxic employees. Done right, you can save yourself unemployment costs and hearings.

Let’s get started.

Employee issues in the workplace

Virtually all issues an employee might have can be separated into 2 categories:

  1. Poor Work Performance
  2. Policy Violations

The latter is a whole lot clearer. For example, if an employee steals, or is chronically late, or calling out sick beyond what your company policy allows for. Those are clear cut, not up for debate or interpretation. Either the employee did those things or did not.

Work performance issues, on the other hand, include a whole lot of things that are subjective, such as:

  • Slow work speed
  • Poor customer service
  • Creating a hostile work environment
  • Sloppy work
  • Having a bad attitude

While the policy violations are quick and easy to deal with, performance issues like a bad attitude are slow and messy to deal with.

How do you change an employee’s bad attitude?

You can’t make someone happy who isn’t happy. You can ensure they have a pleasant working environment. But beyond that, you can only address issues in the workplace that arise from an employee’s bad attitude.

But most of us in leadership roles have tried to help employees with bad attitudes.

It ends up being very time consuming and is very unlikely to change anything. In the end, you will find yourself spending a lot of time on this employee with a bad attitude.

When we spend a ton of time on those “squeaky wheels” we are, by default, NOT spending time with the productive and happy members of your team; the ones who are really driving the business forward instead of into the ground.

That’s not only not fair to the good people, but it’s counter-productive to the success of the business.

For starters, what a “bad attitude” is might mean different things to different people. It also requires some validation and corroboration, especially because a store manager may not work directly with this person and may not be seeing it first hand.

The other thing to know is that you can train virtually any employee with a good attitude to do anything. But it’s virtually impossible to train an employee to have a positive attitude unless it stems directly to some genuine mistreatment at work and you correct that.

How do you address an employee with an attitude problem?

Address an employee with a bad attitude by:

  • Focusing on how their behavior affects the workplace
  • Do not discuss their personal life
  • All discussions should be held privately
  • Potentially contentious discussions should have a witness; ideally someone from HR or leadership
  • After the initial conversation, if no improvement is seen, the next conversation should be documented
  • After the 1st written documentation, issue either a 2nd written warning or a final warning if no improvement is seen
  • After the final warning, termination would be the next step if no improvement is seen

Even though you’ll be unlikely to change an employee’s bad attitude, it’s not right to just fire them without any sort of due process.

Everyone has the capacity to change.

But unfortunately, as my old friend who was high up in HR at Whole Foods used to say “there’s no better predictor of future behavior than past behavior“.

So even though you aren’t likely to turn them around, it’s crucial for the overall health of your workforce, and from a legal standpoint, to go through the steps and do this the right way.

After all, all your good employees know this person is a problem. But if you just fire them outright, it sends a message even to the good employees that they too could be fired at any time for any reason.

You don’t want your employees afraid of you.

So this is the process I followed for virtually ANY performance issue with any employee. Your company may have different rules or systems. It’s also possible the state or country you live in may have different rules.

When in doubt always consult someone in HR in your company or a labor law attorney.


But this how I handled employees with a bad attitude:

1. I started with a verbal 1-on-1 conversation

This conversation, like all HR-related conversations, would be private and not held on the sales floor or in front of their peers.

I would address the issue, but mostly ask questions. I find asking questions, rather than making accusations or statements, puts people more at ease and more likely to talk about what’s really going on.

Make no mistake.

In 99% of the cases, a bad attitude has NOTHING to do with you or the job. It’s something going on in their life on a personal level and they haven’t dealt with it. But as leaders and managers, we can’t ask them about their personal life or make personal recommendations (at least in any official capacity).

At the end of the conversation, make it clear what has been observed (but do not name any names of their peers who may have reported it to you). Then make it clear what the consequences will be if it happens again (and it will).

2. I would issue the 1st written warning

When an issue arises again, now is the time to take it more seriously.

Again in private, but this time with a witness who is in a leadership or HR role. As a matter of course, always position yourself and any official witnesses such that you are not blocking the exit to the room where the discussion is being held.

The employee must never feel like they are being held or unable to leave if they wish. Of course, if they were to leave before being dismissed, that too is a violation that will need to be addressed.

This conversation should be shorter and less casual.

You let them know what was observed, that it’s unacceptable, and what the complete process looks like if they continue the behavior. Do give them the opportunity to explain their side of the story, and to write it down if they choose.

But limit the amount of time you give them for this as these types of people can often go one and on wasting everyone’s time.

In the end, they will sign the written warning as will you and the witness. If they refuse to sign (which is their right) you would note that on the form and still sign yourself with your witness.

3. I would issue a 2nd written warning

This would be issued exactly like the first one.

4. I would issue a final written warning

Like the previous two warnings, but this one should be clear that the next instance will result in immediate termination. The form would ideally indicate this as well, very clearly.

Make sure to keep copies of all documents in case the employee files for unemployment after you fire them. In most states, employees can file for unemployment for any reason.

That doesn’t mean they’ll get it, but the burden of proof will be on you, not them. So have a system where these documents are easily accessible.

I preferred to keep a paper copy in a locked file cabinet but also a scanned copy on my computer. But your company and HR department may have different systems or policies.

5. I would fire them

Firing should be short.

The time for discussion has passed; it’s not up for debate, interpretation, or opinion. You speak, they listen. Stay calm and cool; never yell or raise your voice (even if they do).

Again, have a witness present and document the firing on paper with all persons ideally signing the form.

You state the facts very clearly and logically without emotion: “on this day, you did this, and as we discussed in your previous warnings, the result of this behavior is termination. You are now terminated from this position.”

Ask them to turn in any work items they may have in their possession. If they have a locker in a personal area, escort them to their locker and then see them to a public area.

If they make any sort of a scene ask them to leave immediately and if they refuse, call the police. You never want to escalate anything yourself or do anything other employees may witness that is anything less than 100% calm and professional.

If you follow all these steps, however, the employee will in no way be surprised they are being fired. And if that’s true, they are unlikely to make too big of a scene.

That’s usually reserved for when we, as store managers, didn’t clearly follow this process and the firing came as a surprise.

Can you get fired for a bad attitude?

In short, yes.

That doesn’t mean you can legally be fired on the spot. But generally, many employers have policies against what they call “creating a hostile work environment”. Now if an employee is just a little grumpy, or walks around like Eyeore, that probably doesn’t meet the test of that.

Most companies would be more likely to classify as bad attitude as being:

  • Backtalking supervisors
  • Gossiping about other’s personal information designed to embarrass, create animosity or discredit someone else
  • Verbally harassing others
  • Yelling or raising their voice to others
  • Using profanity directed at others

In those cases, while still following a series of disciplinary steps, an employee could definitely be fired.

What are the legal reasons to fire an employee?

At-will states have laws that basically say that the employer can fire an employee at any time for any reason without legal liability. That doesn’t mean the employee can’t file for and possibly get unemployment compensation, but it would prevent the employee from suing for wrongful termination.

But this depends, assuming you’re in the US, on whether you live in what’s called an At-Will state or not.

Of course, if you’re needing advice in this area, always consult a labor law attorney.

Technically all states are at-will, but some have exceptions that others don’t have. So it doesn’t make sense just to list the at-will states.

Many states have laws on the books that state if the employer has a policy or handbook which specifies why an employee can be terminated, then that is legally binding.

Here, however, is a list of states that DON’T recognize that:

  • Delaware
  • Florida
  • Georgia
  • Indiana
  • Louisiana
  • Massachusetts
  • Missouri
  • Montana
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • Texas
  • Virginia

Then we have some states with a public policy exception.

Normally, for instance, an employer cannot fire someone who files a worker’s comp claim after they get injured on the job.

These states, however, do NOT recognize that right:

  • Alabama
  • Florida
  • Georgia
  • Louisiana
  • Nebraska
  • New York
  • Rhode Island

As I pointed out above, virtually all employee issues fall into either policy violation or poor work performance. In either case, typically following some due process most companies have in place, you can be fired for any of those reasons.

It’s worth pointing out, however, that if you’re working for an ethical employer, they are not just going to fire you for no reason with no warning. And if you do get fired from an unethical company, count yourself lucky you didn’t work there longer.

What qualifies as wrongful termination?

Wrongful termination is when you were fired illegally. Where an employer violated either state or federal law when they terminated the employee.

Wrongful termination, plain and simple is NOT when you think you shouldn’t have been fired. It’s also not when you feel you were fired unfairly.

As an example, if an employer fired someone on the basis of their race, gender, ethnic background, religion, or disability.

As it stands now, while there could be state protections, there is no Federal protection on the basis of sexual orientation or gender identity.

Another illegal reason to fire someone is if they are a whistleblower or have filed a legal complaint against the employer. You also can’t be fired in most states (see the section above) for filing a worker’s compensation claim following an injury.

In other words, the employer cannot retaliate against an employee operating within legal guidelines.

Now on the one hand, if I were fired due to one of those reasons I wouldn’t want to work for those people anyway, and I’d count myself lucky to be rid of them.

But it’s also not right that they get away with it either. At this point, you would definitely want to hire a labor law attorney to see if your claim of wrongful termination has merit.

Final Thoughts

In this article, we took a look at the world of HR and running stores. We examined what is often every store or department manager’s least favorite task; firing someone.

Toxic employees with a bad attitude are a reality that hits every kind of business.

In a way, it’s the worst kind of offense as it’s not as black and white as stealing or harassment. But dealing with employees with a bad attitude can be a huge time suck, so it’s crucial for all the great employees you have to not let it fester.

So here, we explored how to fire an employee with a bad attitude. And more importantly, how to do it in the right way so it’s fair to everyone and keeps you out of hot water with your company’s HR department and the state unemployment office.

 

Is Grocery Outlet’s Independent Operator Program a Good Deal?

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I have a good friend that just became an owner of a store with Grocery Outlet.  As I heard him tell me about his experience, I began to wonder is the grocery outlet independent operator program a good deal?

You need a minimum of $25,000, but be prepared to invest up to $200,000 total, the bulk of which the company will finance. A lower initial training salary, an unwritten policy to franchise mostly to married couples, and possible relocation mean this isn’t for everyone. But some operators make up to $300k per year.

But there’s a lot more to know about the Grocery Outlet chain and how they structure their store ownership and whether it’s a good deal.

So we’ll get into whether it’s a franchise in the traditional sense. But we’ll also look at how much owner-operators get paid and how much it costs to buy into the company.

So let’s dive in!

Who is Grocery Outlet?


If you don’t know Grocery Outlet Bargain Market, they are a nationwide chain of bargain grocery stores.

They are a full-stop shop, meaning they carry all main types of grocery store items including produce, meat, and seafood. However, they focus on close-out items, short-dated items, and other low-priced items with prices that are often up to 60% lower than other grocery stores.

They were founded in 1946. They’re also a publically traded company and currently have well over 300 stores in the US.

Unlike a Wal-Mart or other chain, Grocery Outlet’s offerings often change from month to month depending on what items are available. So only about 20% of the merchandise are items you’ll find every single visit.

Also unlike conventional grocery stores, or even places like Whole Foods Market where I worked for 2+ decades, Grocery Outlet stores are independently owned and operated in what looks like a franchise arrangement.

If you’ve never been in a Grocery Outlet, they are a little smaller than a conventional grocery store (anywhere from 10,000-15,000 square feet). And they might have anywhere from 15-30 employees, which is also smaller than most conventional grocery stores.

The average Grocery Outlet Bargain Market does $130,000 per week in sales. By comparison, the stores I ran for Whole Foods Market did anywhere from $400,000/week to over a million a week.

But given Grocery Outlet’s focus on low-priced bargain items, and often being positioned in low-income neighborhoods, the lower sales model isn’t surprising.

What is the Grocery Outlet Independent Operator Program?

Rather than simply hiring store managers like most grocery stores, Grocery Outlet prefers to find what they call independent owner-operators, the vast majority of which are married couples.

While my friend who is an owner-operator is a solo operator, they almost exclusively hire couples feeling like their business model works best with 2 people in the lead. Given my friend just took his first 3 days off in 8 months, I can understand the benefit of sharing the workload!

As an independent operator, you control the employees and the possible HR headaches.

So in that sense, it’s a great deal for Grocery Outlet. After all, most grocery stores spend a lot of time and money on an HR team, unemployment hearings, and processes, as well as mediating conflicts between employees or between employees and managers.

How much does it cost to become an Independent Operator at Grocery Outlet?

As an independent owner-operator, you buy into the company, typically somewhere in the $200,000 range.

The good news and bad news is that you can finance most of this initial investment through Grocery Outlet. That means you’re beholden to them for a quite a while as you pay that back.

Do plan to have a minimum of $25,000 to invest though.

They are kind enough to not require interest payments below a certain sales volume. BUT that interest is still accruing in your account, meaning you will eventually have to pay it back.

As an owner-operator, while you are 100% responsible for the employees, you still have to buy from Grocery Outlet warehouses and approved product vendors (so they get a cut on the front end and the back end).

You also can’t stray too far from their overall business model.

They call the process “shared risk” with the owner-operator buying most of the equipment in the store (from refrigerated cases to grocery carts, to cash registers, to forklifts). Even if an owner-operator is buying an existing store, these expenses still have to be purchased from the company or the previous owner-operators.

For brand new stores there is also an additional expense of training the employees. That cost too falls to the owner-operator and can run upwards of $70,000.

From a purchasing standpoint, the good news is the owner-operator does not pay for merchandise until it sells so that at least helps keep weekly cash-on-hand needs on the lower side.

What is the Grocery Outlet operator agreement?

The original agreement founder Jim Read had for his owner-operators was written down on a napkin. That was for the first owner-operator, Leonard Downs.

But the company has grown quite a bit since then. Being publically traded now, the company also is under a lot more scrutiny and legal eyes. So it’s not surprising the agreement has become very formal.

First, you have to qualify. After all, they don’t just give these stores to anyone.

They require their owner-operators to have “five years of retail management experience, as well as proven marketing and community skills, merchandising skills, hiring, teaching and coaching skills, and financial and business skills and meet additional financial and background qualifications.”

Then, once you qualify, you’ll be in a training position (what they call their “aspiring operators in training” or “AOT” program) for about 6 months at one or more of their existing stores working with a seasoned owner-operator learning all the processes you’ll need to know to run your own store.

The training program may or may not be in a store in your area, so understand it could mean temporarily relocating.

The typical candidates to be an owner-operator with Grocery Outlet is going to be a married couple who have both worked as store managers for a large retailer. That could be Wal-Mart, Target, or a grocery store.

They are most likely going to be middle-aged. Maybe hit the salary cap at their current employer, or maybe even been laid off. So they are looking for an outside the box opportunity since starting over with another retailer would often mean a much lower salary.

You can read greater detail on the independent owner-operator program on Grocery Outlet’s website.

Is Grocery Outlet a franchise?

Yes is the short answer.

By definition, a franchise is simply a business opportunity where you buy into an existing company in the hopes of not only making that money back but also generating an above-average salary for that type of work.

You pay for their brand name, the systems and business model they already have in place. In exchange, you get to share in the profits you generate by driving sales.

While it’s not the same level of freedom and flexibility as truly owning your own grocery store, there is safety in having Grocery Outlet’s systems and team to assist and guide you. In other words, like working for an employer, you still have to follow rules that other people set. BUT, unlike most employers, you do have greater freedom to make the decisions that you think are best for your store.

And if your decisions drive additional sales or profit, you benefit directly when you get paid.

So it makes sense for someone who has a little cash on hand but doesn’t want the risk that comes with opening their own business from scratch. In Grocery Outlet’s case, the grocery industry is EXTREMELY competitive. Meaning there are grocery stores every few blocks in most major cities.

If you decided to open your own 10,000 square foot grocery store, you stand a very good chance of going out of business trying to compete with Safeway, Wal-Mart, Whole Foods or Trader Joes. So if grocery is your background, buying into a Grocery Outlet franchise might make sense.

How much do Grocery Outlet owners make?

The model at Grocery Outlet works by paying the owner-operator a fluctuating pay based on the gross profit a store generates. So it varies.

Now Grocery Outlet is quick to imply that their store owners make well over $120,000/year. However, the website Glass Door, which independently tracks job salaries, shows their average owner-operator annual pay between $97k-$107k for a year. So a slight difference.

It’s also worth noting that Glass Door’s reviews are pretty kind to Grocery Outlet.

They give them a 3.4-star rating (out of 5). They also get an 89% approval rating for the company’s CEOs (Eric Lindberg and MacGregor Read). By comparison, Whole Foods Market rates 3.6-stars and 65% approval.

But going back to the salary, I can tell you that of course, the more sales a store does, generally the better the gross (and net) profit.

After all, a store doing $85,000/week in sales probably could do $100,000/week in sales without needing to hire any more additional people. That naturally makes a store more profitable.

That being said because the potential to drive sales in your store is theoretically unlimited.

So is your salary potential, and there are owner-operators making $200,000-$300,000 in a year. For a couple who run a store together, that would be the combined salary potential; not each.

Above, I mentioned a 6 month training period when you first come on as an independent owner-operator. Just be aware the salary is fairly low during this period, often as low as $60,000/year.

Who is Grocery Outlet owned by?

James Read founded Grocery Outlet in 1946. At that time he called the store Cannery Sales as he focused mostly on reselling government surplus canned goods.

His sons, Steven and Peter Read took over after their father’s death in 1982.

The current CEO of the company is Eric Lindberg, with former co-CEO MacGregor Read now in the role of Vice-Chairman. MacGregor is the son of Steven Read and Eric is the son-in-law of Peter Read.

In terms of true ownership, the company is currently owned by private equity firm Hellman & Friedman LLC, who bought it from another equity firm, Berkshire Partners LLC, in 2014.

They changed the name from Cannery Sales to Canned Foods in 1970. Then from Canned Foods to Grocery Outlet in 1987, and then became Grocery Outlet Bargain Market in 2009.

What is the “Grocery Outlet” business model?

In very simple terms, as Grocery Outlet puts it, “we buy, you sell” (you meaning the owner-operator).

The Grocery Outlet warehouse buyers find the best deals available from lots of well-known brands. These could be cases of Captain Crunch cereal that got misplaced by the Captain in a warehouse somewhere and now only have 3 months left of the use-by date.

But it might also be a great deal on a trendy brand of coconut water or kombucha.

Grocery Outlet computers know what’s on hand in the warehouses and store owner-operators order that product. Since most products are limited in quantity, the operators who order the earliest usually get the best stuff and are more likely to get everything they order.

The early bird gets the worm, and my friend who is an owner-operator usually starts his day at 4 am.

Because only 20% of the products are year-round items, Grocery Outlet owner-operators are constantly doing resets of their shelves to accommodate new items or reduce space for items they can’t get any more.

Because Grocery Outlet stores are smaller and lower sales volume than the stores I ran, they are not as departmentalized.

What I mean by that is at Whole Foods, someone who works in the cheese department doesn’t also cashier or stock apples. In Grocery Outlet, however, virtually all employees go where they are needed. The upside to that is a highly flexible workforce.

The downside is you have a store of generalists instead of specialists.

As the owner-operator, you buy products from Grocery Outlet, and you not only pay them for those products, but they get a cut of the profits too, so they make out like bandits getting a cut on every side.

Now I don’t fault them for wanting to make money; there’s nothing wrong with that. And ultimately it’s their name on the sign and their success is in the hands of the independent owner-operators.

So is the Grocery Outlet Independent Operator Program a good deal?

Ultimately it makes sense for some people and not for others.

If you’re semi-retired from retail management, over age 40 and finding your career options limited and have a little flexibility (such as being an empty-nester), and you have some savings on hand you can access, this could be the right move for you.

I say the above as you need the flexibility to possibly temporarily relocate for the 6 months of training you’ll undergo once your application gets approved (they don’t take just anyone).

You also ideally need to be married to someone willing to run the business with you. At the very least, you should have a friend or other business partner as they very rarely take solo operators.

You’ll need to have at least $25,000 in cash you can get your hands on for the initial investment. And of course, that’s in addition to borrowing upwards of an additional $175,000 from the company which you’ll pay back with interest.

Because of the possibility of some long hours (my friend often works 4 am to 9 pm), this job is not for a couple with young children. But as you get your store dialed in, staffed well, with the right systems in place, you can, of course, cut back on those grueling days.

But this is not a job for someone not willing to put in a lot of hard work.

So ultimately this is not something I would do as I have 3 young children and a wife I enjoy spending time with who wouldn’t be able to run the store with me.

But for others, especially those in their 40’s or 50’s with a lot of experience who find that employers aren’t receptive to paying them what they are worth, it could be a great opportunity.

It is definitely a great deal for Grocery Outlet, and that shouldn’t go unmentioned.

After all, you pay them to buy in, buy the products from them (so they make money on the wholesale side), give them a percentage of the profits plus interest on the money you borrow from them.

And you have all the potential headaches of HR, customer and employee liability in the case of injury, and other things that cost retailers a lot of time and money.

So it’s clearly a win for them. But for the right person, it could be a win for you too.

Final Thoughts

In this article, I took a look at the world of Grocery Outlet and their owner-operator program.

The program is essentially a franchise program. That means limited ownership and control and shared risk. But the possibility of a very good salary once you get your store dialed in.

I personally spent more than 2 decades with Whole Foods Market in leadership positions. In addition, one of my best friends is an owner-operator for Grocery Outlet. So I brought a great deal of experience and knowledge to the writing of this article.

Are you considering joining Grocery Outlet?

Photo credits which require attribution:

Grocery Outlet in Eugene, Oregon by Rick Obst is licensed under CC2.0