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Comment by crazygringo | Hacker News Reader

I don't see any uneven playing field when it comes to grocery stores.

The national brands and store brands are always next to each other on the same shelf. So there isn't any problem that needs solving. Also brands already pay for promotional positioning (like the ends of aisles), and when the store puts its own brands in those spots it loses out on those payments, and so is effectively paying equally.

So the field doesn't need any evening out there.

If grocery stores ever started putting the name-brand stuff in a back room that took twice as long to get to, then it might become an issue, but as of right now it's just not.

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The brand names pay for their spot, so its moot. There is no meritocracy in grocery store product placement. For the most part the grocery store doesn't have a formula to decide where to put most things based on sales data. If you sell a cereal or soda or fancy mustard and you want premium shelf height, just pay extra for it. The store basically rents the shelf space out.

This is absolutely true in the USA. Frito Lay has done this for years, paying supermarkets for more and more shelf space, while the smaller, regional competitors were left with less and less room to sell.

This happened to my father in the 1980s when he owned a distributorship for a regional potato chip company here in the Midwest United States.

You don’t see the brands they don’t carry at all. Only the brands they carry get displayed and they often make more money on the name brands anyway.

I've heard from a friend (in Australia) if you don't frequently buy placement you get bumped, and buying placement can be a losing proposition. They raise the price to squeeze all margin so it's just on the edge of making it affordable. You have to say yes to losing money during the promotion ("you'll make it up with brand awareness!") to claw it back by staying on the shelves in between. Otherwise another brand, or sometimes a house brand, takes your place.

Does shelf height play that big of a roll in sales?

Oh absolutely, especially because Australian grocery stores tend to be denser and stock less products. Especially the new "Metro" style of stores.

In these formats, you pay for placement or they don't stock you.

It's not just height, it's the positioning at the end of aisles too, and the large 'sales' stickers to draw attention. IIRC they would request an all-or-nothing for your product line, so if it was something like dog food or sauces where you might have multiple variations you had to pay the fee per SKU to be featured, you didn't get to pick and choose. They decided.

Similarly at least one large pharmacy chain supposedly made a significant chunk of profit from charging for catalogue placement.

I don't know about shelf height specifically though, I do know this is an important factor in sales but not sure if there is ongoing 'rent' to pay. There would be a lot of indirect negotiation around wholesale rates that would influence these decisions too.

Shelf height really does matter, check the items that are at “eye” height the next time you’re in the store.

And sometimes it goes so far as to distinguish between the average male eye height and he average female when arranging products.

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