Why do all of the convenience stores sell the same snacks?

The answer to this question reveals a complex relationship between convenience stores and their suppliers. Essentially, the uniform inventory across convenience stores is a result of a business model driven by fear and the desires of suppliers to avoid negative customer feedback.

The Business Model of Convenience Stores

Convenience stores do not typically choose their inventory themselves. Instead, they sign contracts with suppliers who provide a steady stream of goods, often through an invoice system with short-term payment deadlines. This arrangement leaves the store proprietors hoping fervently that their shelves won't become overstocked with goods that won't sell.

The Supplier's Role in Inventory Supply

Suppliers operate within a business framework dominated by fear. Their primary goal is to ensure that stores never run out of inventory. This leads to an excessive supply in the stores, making the internal inventory resemble a closet filled with items that are no longer needed. The result is a logistical conundrum for both the store and its suppliers.

The Conflict Between Suppliers

As competing suppliers vie for the retailer's favor, they use any means necessary to make the retail proprietor feel like they are getting a poor deal. This fierce competition creates a tense environment, known as a "civil war," where both parties are harming the other. This dynamic not only disrupts the harmony of the store but also detracts from the core mission of the business.

Supplier-Store Relationship: A Problem of Trust

The relationship between suppliers and stores is plagued by a lack of trust. Retailers assume that suppliers know best about what will sell in their stores, while suppliers, operating under outdated systems, don't have the necessary insights. The suppliers often provide goods based on deals with manufacturers who may be focused on their own competitive interests rather than the specific needs of the retailer's community.

Outdated Supply Chain Technology

The technological systems used by suppliers are often obsolete. For instance, Walmart's RetailLink, designed in 1986, is a product of an era long past. Despite this, many stores find their shelves empty frequently, such as when they run out of coffee, even in stores where coffee is a regular stock item.

The Impact on Consumers and Retailers

The relationship dynamics outlined above result in routinely overstocked shelves and empty displays. To maintain consumer satisfaction, retailers stock twice the inventory they can sell, primarily to avoid complaints about empty shelves. However, this strategy only leads to wasted space and increased costs.

Conclusion: A Call for Change

To improve the situation, we must address the dysfunctional relationship between suppliers and retailers. By urging suppliers to adopt a more transparent and supportive approach, and encouraging retailers to take a more strategic role in inventory management, we can mitigate the negative effects of such practices. A collaborative effort to rethink supply chain strategies and embrace more modern technology is necessary to ensure success in the convenience store sector.