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Article | March 31, 1998
New machines and materials fuel prepackaged fresh beef (sidebar)
New measures for meat profits?
Although Kroger executives declined to be interviewed for this story one thing is obvious: The Atlanta division is willing to question the age-old "gross profit" measurement for meat department profits. Unless that equation is changed it's almost impossible for prepackaged meats to compete with store-packed meat. However several factors are converging that may force supermarket companies to develop different concepts for meat sales. The spiralling costs of backroom floor space the increased costs and scarcity of trained meat cutters and greater investments in equipment are a concern to many. "At some point we have to take all cutting out of the store" says Al Kober a meat and seafood buyer for Clemens Markets Kulpville PA. Along with the $100 investment per store in equipment he worries about control of contamination at each store. Also important he says is the cost of the floor space. "All of the space in a retail outlet should be dedicated to sales. We need to move [meat cutting] to a place where cost-per-square-foot is low." These attitudes says Steve Saterbo of Colorado Boxed Beef may be the leading edge of a fundamental shift in meat retailing. That will come he predicts when the "gross profit" concept on fresh meats is replaced by a more realistic scrutiny of overhead and profits. c
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