How do some businesses stay in business?

General Questions
#1

We have 3 local grocery store chains: Publix, Food Lion, and Winn-Dixie. I’ve been
to all three this week, and (no new surprises) Publix consistently has the most
customers, but quite a wide margin. Winn-Dixie has about half what Publix usually
has, all other things being equal, but Food Lion is a mystery-I can’t remember
when I went there that it wasn’t a ghost town.

Now Food Lion and W-D both have automatic checkouts (where you scan your own
goods-no cashier needed), but that would only help a little bit, right? But Food Lion
has been in business for almost 20 years here, and managed to survive one of those
“dirty” grocery issues about 10 years ago (where someone finds something gross
in some produce or something). They’re still here, but I can’t see how they are
doing anything but drowning in the red.

Any other places where it’s a mystery as to how they keep going?

#2

Perhaps one is operating under a more favorable labor contract? Perhaps the less busy one has higher margins and more individual service? The less busy one may have lower rent because of a less desirable location, etc. etc. etc. Without knowing all the details, hard to say.

#3

IIRC these are all members of chains with dozens if not hundreds of locations.

Of those locations invariably some of them will barley break even or consistently lose a little. They will stay in business hoping to hold market share in the area. Sometimes these stores will do things like stay open later on holidays and things like that which allows them to squeeze out a little extra money in crunch times.

#4

Some places are deliberately run as tax dodges, too.

For example, it was widely known here that Coles-Myer (a massive retail conglomerate) operated the Red Rooster fast-food chicken chain as a massive tax write-off, until they sold it in 2002.

I’ve only ever seen ONE Red Rooster that A) I’d consider eating and and B) with any more than a handful of customers in it at any given time, and that’s the one at Brisbane International Airport.

Red Rooster had, for quite a while, a reputation as being the place were “poor people” ate- even though it’s exactly the same price and quality as KFC.

In some places, they’ve never managed to get past that, and it’s a mystery to me why Red Rooster is still in business when there’s almost always a KFC (or ideally something even more edible) nearby.

#5

Another key is if they also have a gas station. My friend (who is in the grocery store business) looked at one up for sale here which had an included gas station. According to her research, the gas station “pulled” the store. In other words, the grocery store alone would not make it. She decided not to bite on the offer.

#6

Thats pretty typical for small stores unless they have some other draw/location bonus like 4-5 miles to the next grocery store.

When a bunch of 7-11 stores around here stopped selling gas they went from booming businesses to occasional foot traffic only.