When they write the history of 2000 to 2020 a huge chunk is going to have to be about the logistics revolution, with a lot of incremental innovation on models which already existed being qualitatively different when exploited properly. Example:https://edition.cnn.com/interactive/2019/05/business/aldi-walmart-low-food-prices/index.html …
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Anyone can sell milk cheaper than WalMart. All you have to do is be willing to lose money. Not quite as vacuous as it sounds, either. Milk is very often used as a loss leader since many customers (incorrectly) use it as a price benchmark.
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This is an interesting instance of Goodhart's Law that I had not thought of before: if consumers base their decisions on one particular price as indicative, then that price will soon stop being indicative.
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The shocking thing about Aldi is how it is actually *good*. Their store brand goods are actually better than comparable brand name stuff.
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A large part of my thesis about how Euros get away with lower salaries than Americans while still remaining happy involves hard discount stores like Aldi.
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It's an important lesson though that Aldi saves labor costs *by paying people more*. Okay, the savings are really due to better training, but the better pay then helps to retain staff.
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Point is, they're saving labor costs by investing more in their people. The competition is penny wise, pound foolish.
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"We're going to hook up the cows right behind the milk cooler in the store "
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“Milk prices” is our internal family joke when somebody wants to indicate lack of care towards particular subject
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It is all about optimizing their supply chain. German efficiency at its peak. This allows Germans to spend the least on groceries proportional to their income in the entire Europe (or, maybe it's their food culture...)
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But what they don't tell you in the article is that their secret is their economics especially supply chain economics and their terms of payment
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