How come prices in supermarkets vary so much from the prices in private stores? How can they afford to have?

Question

such low prices? Where is the profit?

Answer 1

There profit is from quantity. If you buy a large quantity you get a lower price. There for you can sell at a lower price and still be profitable.

Answer 2

Private store owners thrive on lazy Americans. No matter who you are if you just want one thing from the store- it is alot easier to just run into the local convience store, than to drive to the busy grocery/supermarket? Where you get to fight the crowds, hunt for what seems like non-ending minutes for one product, then to stand in line to pay for that one item. And most importantly, when you go into the convience store you usually only buy what you went in for- which means you will return for it's ease of selection, and your quick return home, unlike the bigger store, which you never walk out with what you came in for, and if you by chance you do, you have as pretty much bought the rest of the store as well. And in doing so have spent more by going to the grocery store than you would have at the convience store.

Answer 3

like the rest has said.
supermarkets buy in bulk thus reducing their total cost.
as well as their average cost.

Also for private stores, their prices tends to be higher are due to a few reasons as well. Private stores are usually strategically located such as in the heartlands, providing more convienance for shoppers whereas supermarkets are usually in the cities.
If you want to find out more, you could always check out economics textbooks, alot more illustrations and explanations there i'm sure.

Answer 4

Supermarkets are able to buy goods at a much higher volume than your privately owned grocery store. The more they buy, the more they save and the more you save at the checkout.

Answer 5

Big stores negotiate smaller costs with the venders, and they buy in bulk. Sometimes the bulk is so huge (thus they pay so little per item) that certain venders can't even afford to produce enough material. Such is the case with Walmart - i know this because my family's company can't afford to abide by their rules. So we're only in Target and similar stores.