RIGGED
SUPERMARKET SHELVES FOR SALE
cspinet
Written By
Gary Rivlin
Edited By
Jessica Almy, J.D., M.S. & Margo G. Wootan, D.Sc.
Center for Science in the Public Interest (CSPI)
Acknowledgments
Jeff Cronin, Michael F. Jacobson, Laura MacCleery, Sara Ribakove, Emily Snyder,
and Jane Welna provided valuable suggestions and review of the report for
which we are grateful. Tony Ellis and Eva Reynolds assisted with fact checking.
Editors’ Note
We wish to thank the people, named and unnamed, whom we interviewed for
this report. The conclusions in this report are based, in part, on the information
they provided, but do not necessarily refect their views.
CSPI and the Nutrition Policy Project
The Center for Science in the Public Interest (CSPI) is a nonprot organization
based in Washington, D.C. CSPI has been improving the public’s health through
its work on nutrition and food safety since 1971. CSPI is supported by the
subscribers to its Nutrition Action Healthletter and foundation grants. CSPI’s
Nutrition Policy Project works with concerned citizens, health professionals,
government ofcials, and other nonprot organizations to strengthen national,
state, and local policies and programs to promote healthy eating and reduce
obesity and diet-related diseases such as heart disease, cancer, and diabetes.
For more information, contact:
Center for Science in the Public Interest
nutritionpolicy@cspinet
202-777-8352
Rigged: Supermarket Shelves for Sale is available online,
free of charge at cspinet/Rigged
September 2016
cspinet
Table of Contents
Executive Summary ..........i
Introduction ..........1
Why It Matters ......7
A Tilted Playing Field ...7
Location, Location, Location ...9
How We Got Here ..........18
A Land of Giants .........18
A Shift in Power ..........20
Putting Big Food’s Interests First ......20
Lock Up a Space ..........22
How Food Manufacturers’ Payments
Affect the Consumer Experience .........24
The Two Million Dollar Entry Fee ....24
Endcaps, Shippers, and Pedestals.....29
Trade Spend .....31
The Bottom Line on Fees ........33
“Within an Arm’s Reach of Desire” ..34
The System and the Little Guy ..........36
Other Retail Stores .........39
Placement Fees and Convenience Stores .....39
Food Sales inside Non-Food Stores ..41
Policy Recommendations ..........42
References 45
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Executive Summary
Supermarkets are so familiar that it’s easy to take their design
for granted. Begin with produce, shop meat and dairy along the
perimeter, and end at a candy display by the register. Pyramids of
soda 12-packs celebrate the upcoming game. Bakery scents waft
throughout the store. But why do nearly all American supermarket
chains generally follow the same layout, offer the same products,
and use the same display techniques Is it because this is what
American customers want
In part, but consumer demand is not the only force that drives what
supermarkets sell.
Backroom deals between stores and food manufacturers also shape
today’s supermarket. In this world of wheeling and dealing, what
customers want often takes a back seat to corporate contracts.
Payments that food manufacturers make to retailers infuence
which products are offered and how they are displayed. Ultimately,
those placements help drive what people buy.
Companies spend billions of dollars so that their products are
featured and promoted in as many places as possible and in the
most attention-getting places in supermarkets, infuencing what
people purchase and eat. First are the steep “slotting fees” that
stores regularly assess manufacturers seeking to introduce a new
product into the market. Perhaps a company has developed a
lower-sodium version of a popular snack food. That innovator
would need to come up with at least several hundred thousand
dollars, if not $1 million or more, to introduce that new item in all
stores of the country’s largest grocery chains.
For many categories of food, the payments do not end there.
Supermarkets often charge manufacturers an additional placement
fee as an annual rent for a spot in a freezer case or on a shelf. Those
fees, or the equivalent in free product, can add up to hundreds of
thousands of dollars in payments each year. That may be the cost of
doing business to the multinational giants, but fees that steep can
pose an impossible barrier for small companies.
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The checkout aisle is typically the most expensive real estate in a
store. There, a manufacturer can expect to pay a large supermarket
chain as much as $1 million a year to place a single product on the
shelf. Then there are the lucrative “endcaps” (end-of-aisle displays)
and “shippers” (cardboard displays) that the big grocery chains
offer food manufacturers like items on a menu. A single “event”—a
few weeks featured on an endcap or on a shipper—at a single large
chain could cost in excess of $50,000. All of these options add up
to “360 Degree Marketing” for the biggest food companies, as a
former marketing executive at Coca-Cola called it.
A spot inside a store’s weekly circular (also for sale) is out-of-reach
to many companies. Then there are the billions of dollars that food
manufacturers collectively spend on seasonal promotions (buy-one,
get-one-free sales; 20-percent-off deals; and the like) that retailers
typically demand of their suppliers. The ability to pay those “trade
fees” represent another critical advantage that the food industry’s
largest players have over smaller companies.
All told, supermarkets collect more than $50 billion a year in
trade fees and discounts from food and beverage companies,
according to a group of academics headed by Gregory T. Gundlach,
a marketing professor at the University of North Florida. As a
result, the food system is rigged against everyone but the big food
manufacturers with big marketing budgets, which tend to be the
These cardboard displays (“shippers”) allow Nabisco and Kellogg’s to get their products
in front of customers who skip the cookie and cereal aisles. Their placement near the
dairy case suggests that customers buying milk should also buy cookies and cereal.
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