Do we choose ourselves what food products we buy at the supermarket? Yes and no. Ofcourse we choose what we take from the shelves. Nobody is forcing us to buy a certain food product. On the other hand, our shopping behavior is being influenced by other things than personal preference. In this post I will try to find out why more oftenpeople buy junk food instead of healthier food.

Food companies have the task of promoting their products. They do this by making advertisements, TV commercials, billboards and through many other channels. Supermarkets on the other hand have a different task. They must sell products. That's how they generate profit. If a supermarket sells more items, it will generate more income. To sell more, supermarkets have developed several marketing strategies which are based upon extensive scientific research.

I talked about a few of these strategies in another post: Supermarkets: designed to sell. My conclusion in this article was that the more products you are exposed to, the more products you are likely to buy. This fact is at the same time the reason why supermarkets use slotting fees and why junk food sells best.

Slotting fees 1980's: Insurance

So what is a slotting fee? A slotting fee is paid to a supermarket by a food company when introducing a new food product. Slotting fees were invented by supermarkets in the late seventies to cover the labelling, organizing and placing cost of new products. Supermarkets have very low profit margins and therefore, introducing new food products is a risky business. If a new product doesn't sell, shelf space is wasted and money is lost. In this way a slotting fee was supposed to be some sort of insurance for the supermarkets.

Slotting fees now: Advertising

But since the eighties the slotting fee concept has evolved. They are no longer just a way of ensuring profits. Slotting fees are now mainly used to advertise products in a way beyond imagination. Food companies will rent high-traffic shelf space at eye-level. They will fill several shelves with products in huge quantities, make promotional 'pyramid islands' and place food sample stands to seduce consumers into buying their product.

Slotting fees go up to several thousands of dollars, going as high as 200.000$ for one single product in one supermarket chain. Obviously, these high slotting fees are no longer meant to secure supermarket income. Slotting fees are now mainly a channel by which food companies advertise their products.

Slotting fees stimulate junk food sales

Such high slotting fees make it very hard for smaller food companies to compete. The food companies able to afford these expensive fees usually sell junk food, containing very cheap ingredients. The money saved on ingredients is spent on advertising and expensive slotting fees. This is why junk food sections at the supermarket are so large and extremely visible, and also, very popular.

The biggest beneficiaries of the slotting fee system are the supermarkets. Before slotting fees ever existed, supermarkets had very small profit margins. Since slotting fees became big business, many supermarkets have doubled their profit. The consumers on the other hand pay the price, money and health wise. How sad.

Related Article(s)

• Junk food: Convenience and low price equals bad deal

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Comments (1)

This is probably why I shop elsewhere
written by Metroknow - AlmostFit.com , February 28, 2008

Great post - I knew that such things existed but had no idea how much money was involved. Really interesting, and well written.

For me, my shopping habits now lean as far away from major supermarkets as possible, primarily because they sell a lot of junk food, heavily processed food marked as "healthy", and so forth. For most things fresh I stick to farmer's markets or local co-ops when possible, as well as Trader Joe's for almost all of our staples. Of course, there are things that you can't get anywhere else other than large chains, so I do go there occasionally, but the more you get away from them the less you need them, and the more obvious the advertising manipulation is.

Supermarkets are a fascinating development in human interaction -- There are probably whole college courses on the science of supermarkets!

Thanks again - keep up the good work!
Metroknow
http://www.almostfit.com