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Easy Profitability

Grocer Prepared Foods

#Grocery
ProHub Comment

This is a well-structured profitability case that guides candidates through isolating a problem area within a specific business segment. The case uses progressive reveals of data to help candidates identify that two new prepared food products (buffalo chicken tenders and made-to-order sandwiches) are destroying margins due to high fixed costs and inventory waste, ultimately rewarding candidates who dig deeper into cost structures rather than accepting surface-level analysis.

Estimated Time 15 minutes
Difficulty Easy
Source Columbia
50 / 100
Our client, Best Market, an independent grocer in Manhattan with only 1 location, has been facing increased competition from low-cost competitors. Therefore, they have become increasingly dependent on prepared foods to drive growth. However, the client has reported that they have experienced zero growth in gross profits over the last 3 years. We have been asked to help the client understand what is causing this lack of growth and what they need to do to turn things around.

Clarifying Information

  1. Where is the client located in New York? Harlem (Manhattan)
  2. Does the client have a specific financial target? No, they just want to identify the problem and figure out ideas to solve the problem
  3. Additional detail on the client? More than 30 years in community, family owned/operated, mid-tier (i.e. like Safeway or Stop and Shop, not Whole Foods)
  4. What are the clients’ revenues/costs/profits? We’ll get into that later in the case