Efficient Bagging and Supervalu competitiveness

A Wall Street Journal article (March 22, 2011) describes rules at Supervalu to increase bagging efficiency and thus decrease the more than 1.5 billion plastic and paper bags used across stores. The articles reports that a projected 5 % savings in bags translates to a $ 4 to $ 6 million annual savings.  These savings can then be used to lower prices for bread, frozen shrimp etc, thus making increasing the chain’s lagging competitiveness as customers move to discount stores.  The impact of better packing will potentially increase bag weights or come from elimination of bags for milk or other items in large containers with handles.  Will the customer satisfaction impact from heavier bags be outweighed by pricing competitiveness ? Should customers be encouraged to eliminate bags altogether by appealing to green benefits ? In general, what role can changes in customer preferences play in improving retailer costs and benefiting customers ?

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About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues, Sustainability and tagged , , , , . Bookmark the permalink.

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