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Supermarkets in the US have such low gross margins.
Kroger - 23%
Publix - 28%
Albertsons - 29%
Walmart - 25%
When we first saw this data at @farmsteadapp, we couldn't believe how low the average was. A quick thread
Kroger - 23%
Publix - 28%
Albertsons - 29%
Walmart - 25%
When we first saw this data at @farmsteadapp, we couldn't believe how low the average was. A quick thread
These gross margins show food waste, supply/demand dynamics, pricing, and competition on a national scale.
Traditional grocery stores aren't set up to predict demand from the end customer - the family buying and using groceries - and meet that demand with just enough supply.
Traditional grocery stores aren't set up to predict demand from the end customer - the family buying and using groceries - and meet that demand with just enough supply.
The grocery store itself is a gigantic showroom that needs to be filled, creating a huge amount of food waste across the entire food ecosystem.
How do you improve gross margins? By selling more fresh produce, dairy and other perishables
They're higher margin than non-perishables. But all that margin is lost when food rots sitting in distribution centers or at grocery stores' showroom floors.
Time to change this.
They're higher margin than non-perishables. But all that margin is lost when food rots sitting in distribution centers or at grocery stores' showroom floors.
Time to change this.
Farmstead’s approach to improving gross margins is data-led.
Grocery OS’ machine learning (ML) models make inventory decisions, based on multiple factors that tie directly to end-user demand. That's how we sell more fresh products, while cutting food waste.
Grocery OS’ machine learning (ML) models make inventory decisions, based on multiple factors that tie directly to end-user demand. That's how we sell more fresh products, while cutting food waste.
Our gross margins are in the mid to high-30%s, some 30-50% higher than traditional grocery.
As more weekly customers shop across larger geographic areas, Farmstead’s ML models get better at predicting just the right amount of fresh food to bring in, while our vendors deliver more product directly to our distribution centers at lower transport costs.
This data-powered flywheel means Farmstead customers pay the same or less than stores, more customers get free delivery to doorstep across more cities each day, all while margins steadily improve.
A new path forward.
A new path forward.
We think of increasing margin as driving efficiency across the entire supply chain that we ultimately deliver back to the customer as savings, in the form of lower prices with better tech, and a better product experience.
At Farmstead, high margins, fresh food and a perfect online grocery experience for our customers are all aligned. We can't wait to bring this model to more US cities this year. https://twitter.com/Post_Market/status/1329529029435609088
