2 pages on solving Wegmans problem below 2-3 sources Bus- Operations management
Wegmans issue
Many of this company’s stores are referred to as “Super-Stores”. This means that in square feet, they can be upwards to 100000 square feet. That is more than double most regular sized grocery stores. In the last few years, there has been a leaning towards building smaller, more homey, feeling grocery stores. Companies like Trader Joes and Aldi have witnessed a lot of profits from opening these type stores (Tuttle, 2014). There are many problems associated with opening and operating these giant super stores affectively. For one, it is very expensive When competing with the smaller stores, Wegmans will notice that with the added cost of running the giant stores, cuts have to be made in discounts to hold at least a small bit of margin and not take a loss. This is where the smaller stores could get them on price. It clearly takes a lot more labor, electricity, initial cost of such large buildings than it would a smaller one. Recently there has been a trend in the population to more go to meals and snack foods. This leads to more shopping trips but less bulk items of food. Customers don’t have to fill their carts all the way up each week to make it through to the next. Trends like this lead to more food staying on the shelf for longer amounts of time (Haddon & Jargon, 2017). This could not only cause waste but holding a lot of inventory longer there by reducing profits. For some reason the millennials are the ones that tend to look for foods that are cheaper and more convenient (Haddon & Jargon, 2017).
Wegmans supermarkets being known for being superstores will make it more challenging to enter some of the urban areas. Some of the super stores have chosen to scale down in urban areas to attract more of the millennials. Walmart has done this with its smaller grocery only stores. Things to think about when opening a new super-store would be it will be very difficult and tie up a ton of resources to open new stores in New York or Manhatten.
Haddon & Jargon, J. (2017, July 31). Supermarkets Face a Growing Problem: Too Much
Space. Retrieved from https://www.wsj.com/articles/supermarkets-face-a-growing-problem-too-much-space-1501498802
