Scale.
Anything living has a level of variability and likelihood of failure/damage/spoilage to it that gets harder and harder to manage as your scale gets bigger.
When you're a small shopkeeper who sells about 3 baskets of apples a day, it's both easier to sift through it and throw out the bad ones AND easier to find 3 basket's worth of apples that meet your quality expectations.
When you have to move 3 pallet-loads of apples, though, not only does QC become a more complicated endeavor, but you have to find 3 pallet-loads of apples to sell at a competitive price, so you may not have the luxury of being so choosy. When pallet-loads scale up to shipping-containers. . . you can see where I'm going with this.
And then there are logistics issues. If you're a large retailer you have to bring everything into centralized warehouses and then send them out. This means things need to travel longer distances and/or have longer shelf-lives. The upshot of that is they have a higher chance of either being past their prime by the time they get to you, or that had to get picked before they were properly ripened on the vine.
When you're smaller, have smaller scale suppliers, and less complicated distribution networks a lot of that extra burden falls away. Starbucks had this problem when they first started to get big too. A lot of people give them flack for over-roasting their beans and giving everything a charred/muddied flavor. When they were small they were able to be choosier about the beans. As they grew the scuttlebutt is that there just weren’t enough beans of that quality level on the market, so they had to lower the quality threshold and move to darker roasts. They still sell better beans, but only in select locations.
So instead of "I want to grow, and my current 100 suppliers are an unmanageable drag on that." being followed by "I need that consolidated towards 10, so my purchasing agents can talk with them all more often, and thus better manage my supply chain.", it might instead be followed by "I need that replicated towards 1000, so my purchasing software has the sample sizes and redundancy to do the machine learning and statistics to better manage my supply network."
> When you're smaller, have smaller scale suppliers, and less complicated distribution network
A more complicated to manage network in some ways. Lots of fine grain tactical purchasing with multiple competing suppliers, that you couldn't staff at supermarket scale.
Well yes and no. Objectively it is more complicated, but it's a sort of complexity that humans can handle intuitively since it's mostly about personal connections and relationships. It's not as abstracted as more expansive supply-chain logistics are.
Why are Amazon and Walmart so successful and cheap?
Rationalizing your question: Amazon and Walmart predominantly sell shrink-wrap manufactured items with nearly unlimited shelf life and minimal variability. The supply chain is very different and much more forgiving.
Walmart does sell groceries, but it's unclear if they're especially successful at it, or if their prices are especially good. I don't feel there's enough information here to encourage or discourage your skepticism.
Some people don't want to buy food with cardboard signs and cash.
Hell, I've heard California even has people who are fans of convenience so much they will pay for other people to do the grocery shopping.
Chicago Resident.
(I agree though, I think this is something that is going to happen - just have to find the right business model at the right time.)
From what I remember I've seen quite a few "night time delivery only, no pickup allowed" grocery "restaurants" on those services
I am not sure why they failed but more recent attempts seem to be succeeding. My two current theories are: 1. They were ahead of their time. There weren't enough people shopping on the Internet to sustain them back then. 2. They were killed by structural obstacles that may also kill the new versions.
Gee, I wonder why do you have to pay with cash....that might be one contributing factor why prices can't be matched by mainstream retailers.
Most people in their communities are fine with it.
Must be some sort of a superstition.
Maybe they're cheating. IMHO, most of that cash register discipline is because the owner (or his immediate family) isn't running the register.
Im sure you can get away with not paying taxes for a while, but if you're going to have a generational store, you've got to be honest.
Technical controls are cool and all. When you can just look over and see you need more cans of soup, when you implicitly trust your employees, and you're not looking to make a quick buck and run away, they're just a lot of work for not much value. Scaling has a cost.
Paying actual taxes is a fast way to bankruptcy here :( , the above-board companies look for tax loops, smaller ones make do with dual-accounting and understating income.
Government figured out that income tax is the most difficult to fake and heavily hammers employees :(
Cash also has a cost, which can often be greater than 5 cents.
It's nice to buy a pack of cigarettes with cash and not worry that my health insurance company is going to somehow find out.
Probably volume. Chinatown is extremely dense and has such high foot traffic that it makes sense to operate without refrigeration, with goods stocked from neighborhood warehouses.
Most parts of the country don't have anywhere near that level of density, so the economies of scale wont work out like they do in Chinatown.
Most Americans buy groceries from a large corporate-owned store that they drive to and has everything, which compete with other large corporate-owned one-stop-shop that you have to drive to.
The older I become the more I realize how absolutely devastating the development policies of sprawl and low-density have been to all areas of human endeavor. You can't have effective competition without density and an ability to start extremely small.
This is a good metaphor for Net Neutrality. Maybe most of the US doesn't understand Net Neutrality, because they are trapped in their strip-mall big-box store hell, and don't know about real free markets IRL.
The Saturday morning farmer's market seems a reasonable approximation of these Chinatown markets at a sustainable scale for smaller/less dense regions. But really, population density is the magic sauce for demand in cases like this.
But a lot of places like this were eventually abandoned or demolished, except where they could be maintained or redeveloped as a tourist attraction, like Cincinnati did a few years ago. http://www.findlaymarket.org/
Actually, compared to farmer's markets, the big difference is the network of small-scale independent warehouses. This isn't farm-to-consumer or farm-to-retailer, it's just nimbler distribution.
I think price is good but the quality varies, as everything is coming up from NYC. Typically I buy scallions, onions and peas every month or so if I stop in to pick up a few other things like dumplings or sauces.
The fact that the prices are usually round numbers (e.g. when I buy apples they're almost always $0.99, $1.49, or $1.99/pound) seems to support the idea that stores aren't trying hard to wring out every last bit of competitiveness from this stuff.
There are enough people in a metro area who want this and are willing to go to the asian district to get it. The five or 20 families in a subdivision who want this are not enough for all the Safeways and Krogers in the subdivision to stock this food. But enough handfuls of those families across the area are willing to go to the few stores concentrated "in the asian district" to make it viable for those few stores.
This is also capitalism at work. Huge markets and niches both have ways to operate.
As for tracking and safety, as others on this page have noted, knowledgeable (and alert) shoppers and proper preparation go a long way to promoting food safety at the end-use end of the chain.
If you think there are some regulations that Jetro or whoever is enforcing that these other wholesalers aren't then post that. Otherwise this just comes off as a subtly racist comment.
This is also the reason that Whole Foods has gone downhill, they used to use similar networks but as they've expanded they've been forced to use larger more mainstream suppliers.
I feel like the reason Safeway can't replicate this is because they have regional distributors. Having each and every store work independently requires very shrewd buyers on the retailer side. Furthermore, there's the expectation of having certain items for sale, regardless of demand or price fluctuation. There's no expectation for the Chinatown retailers.
(basically, supermakets sell produce to Chinatown vendors for a lower price, who then move it to a segment of the market which is willing to buy non-aesthetic food which needs to be eaten in a day or two)
I don't doubt, however, that mostly untracked/untaxed cash transactions (both store-customer and wholesaler-store) contribute to some of the price differential.