250k skus seems pretty arbitrary. What's the significance of this number? A bodega goes a long way for most people's daily needs.
Price conscious buyers will opt to drive to the bigger, farther away store because it has more variety, and the essentials are cheaper.
I know I do this.
Part of this is overregulation, with zoning and planning departments enacting policies that make smaller retail spaces less attractive to builders and owners, leading to a low supply, and allowing egregious rent for well located small retail.
Yes, economies of scale likely mean that larger businesses can afford lower prices, but smaller businesses also get to avoid some costs (no large administrative corporate departments necessary for a one-location bodega), so the prices probably don't need to be as far apart as they are.
Robinson-Patman is terrible law that’s more or less impossible to enforce equitably. So it hasn’t been.
I hope government representatives have things to say about that.
A world where it’s enforced uniformly and strictly might have some local benefits, but getting the government involved in regulating every wholesale transaction for “fairness” is a recipe for stagnation, corruption, or more likely both.
It’s much better for governments to be principled, and only interfere with mutually voluntary engagements by citizens when there’s an urgent harm to remedy.
Aldi and Lidl carry ~2-3k SKUs. A regular grocery will carry maybe 20k. In places where enough of these are built close to where people actually live you don’t ever need to touch the car for shopping. Small shopping centers (those that also have a something like a small book store) will add a few more thousands. A requirement of 250k SKUs in a 20min walking distance is going in the territory of once in a year or more purchases.
I think I drove to do groceries a handful of times in the last 10 years. I have multiple chains close enough that I can always walk, I can buy smaller batches and always have fresh food rather than a truckload to last a whole week but be stale by the end. Self checkouts and the abundance of stores means I have almost 0 wait time.
It can work but it has to be designed properly, and people need to change their habits a bit. Like not expecting hundreds of thousands of SKUs 10 min away at all times (which implies a huge store, so far from where people live).
Lidl also has this interesting approach that they rotate some assortment. You can't find everything all the time. But once you realize that certain things periodically come back, you pick them up when they are in stock to make sure you have them at home. It is not as convenient, but if you make it a habit, it is a very minor disadvantage.
But as you say the 20k SKUs premium stores stock aren’t a necessity. They drive up the costs for the store and the price for the buyer all so the buyer has the feeling they bought something different, when many brands are anyway the same product under different labels.
The premium store 3 minutes from my home stocks 30 types of mineral water. Aldi and Lidl stock maybe 3 of those 30. That’s what 99% of people buy anyway.
Until there's one less common thing you want. If you don't care much about flavour or have no taste in products then you can sub in any crap food or product.
I go to a particular supermarket because it has the tomatoes I like: they just can't be substituted. It also has an uncommon milk that is the only one I really like. The issue gets harder once you desire specific Deli foods.
How much of SKU selection is driven by individual consumer tastes? Some brand selection is driven by other causes.
250k SKUs means everything anyone would ever want. But the distribution of the demand for those SKUs is very lopsided. 20k are what everyone buys. Another 20k are probably things almost nobody buys. So how could you have both high and low demand items spread equally through a city without creating waste? If everything needs to be 10-20 min from you then somewhere a store is sitting empty with barely any customers or a shelf isn’t touched by anyone. The logistics for stocking and supplying products almost nobody buys costs everyone else.