The secrets of supermarketing: A model balanced on a knife-edge

What if supermarkets’ famously cheap prices weren’t simply a matter of ‘economies of scale’? A look at the research from the past 60 years suggests that this classic model doesn’t really work for the supermarkets. This report by Professor Lisa Jack, one of the UK’s few accountancy academics to focus on the food system, finds that the business model of supermarkets is on a knife edge: tiny, and heavily protected, profit margins applied to large volumes of goods keep the system running. Consumers benefit from a near-endless array of cheap food, but the system is left in a balancing act that could easily go awry.