Microeconomic Paper
Title
By Roberta Smith
ECO100
Professor’s Smith
Date August 09, 2021.
Microeconomic Paper
Title
Industry Goods and Services
The nineteenth-century general store, which sold everything from farm implements to clothing to food staples, can be considered the direct progenitor of the modern food retail industry. (Encyclopedia, 2019). The retails food industry sells food and non-food supplies to convenience stores to supermarkets, supercenters, and extensive warehouse facilities. Gas stations are also selling a limited of grocery items. One of the first supermarkets—initially calling itself a “warehouse grocery”—was the King Kullen, founded by Michael Cullen in Jamaica, Queens, New York, in 1930. (Encyclopedia, 2019). Grocery stores operated out of available spacious property such as garages, factories, warehouses, and movie theaters. (Encyclopedia, 2019) In 1859 the first food store called the Great Atlantic, and Pacific Tea Company (A&P) started a tea shop; by the end of the American Civil War, twenty-five stores began selling groceries. (Encyclopedia, 2019) In the industry today, in 2015, there is about 42,630 supermarkets and grocery stores and over 39,700 convenience stores in the United States. (Encyclopedia, 2019)
In 2008, about 120, 00 convenience stores were connected to the gas station in the rural areas. In those stores that are part of a gas station, an average of 65 percent of revenue comes from gasoline sales; groceries account for 12 percent, cigarettes 11 percent, beer, wine 4 percent, and prepared food (such as hot dogs and burritos) 2 percent. In addition, most such places also dispense lottery tickets in states where they are legal. (Encyclopedia, 2019)
Studies implemented prices and convenience are what customers wanted most over particular brands or stores. Supermarkets that offer lower prices, discounts, coupons, and reward programs were more likely to retain long-term customers. Customers having online shopping from companies such as Walmart and Costco also are a draw for customers. Both companies offer to produce meats, dairy products, baked goods, frozen foods, and pharmacies that fill prescriptions for medications. (Encyclopedia, 2019)
After Walmart, the Kroger chain, online sales are the largest retail chain in the United States in the supermarket chain. By 2013, it had over twenty-six hundred outlets subsidiaries located in more than thirty states. (Encyclopedia, 2019)
Describe a Microeconomic Variable for Your Industry
The food industry focuses on costs, profits, and goods that determine the price of food products when they reach the consumer. In recent years approximately 40 percent of the market shares have been stable.
The Food Expenditures
Most food expenditures are spent at the grocery stores for use at home. The farm value of food commodities originating on U.S. farms was about $120 billion in 1997, a $2-billion decrease from 1996. (Economic Research Service/USDA) The Market Bill is essential to the food industry and the economy. The $441 billion paid the wages and salaries of 13.7 million employees in 1997. This bill also covers all the food industry functions such as transporting, wholesales, and retailing. (Economic Research Service/USDA)
In 1997 the Labor cost increase by about 5.7 percent. Because of hourly wages, which increased the rate more for food manufacturing. (Economic Research Service/USDA) The Market Basket and Marketing Bill Measure Food Marketing Costs in Different Ways.
The USDA uses the Market Basket method to track the retail market’s cost and price changes by the causes of changes by the stores’ prices. The retail price method of the market basket consists of two parts the farm value, which is the prices receive by the farmers for the goods and products that must be sell. Thus, the farm to the retail price spread is the price and farm value, the costs of processing, wholesaling, and retailing foods. The marketing bill focuses on the changes in marketing costs and expenses. (Economic Research Service/USDA).
How Government Might Impact the Industry
The government can change monetary and fiscal policy, such as increasing and decreasing interest rates, substantially impacting the business industry. They can raise the currency, which lifts corporate profits and share prices, but ultimately lowers values and increase interest rates. Higher taxes and fees and more effective regulations can hinder businesses or entire industries. Government regulations can increase costs. For example, include the cost of materials or labor to make a product or deliver a service. Rules also cover marketing and advertising, such as in the healthcare industry. For example, when you see print ads for drugs, you will often see the back of the page filled with legal disclosures. This is mandated by government regulation of healthcare advertising and increases the cost.
Sources
Liebman, R. (2019). Food retail industry. Salem Press Encyclopedia.
https://eds-a-ebscohost-com.libdatab.strayer.edu/eds/detail/detail?vid=13&sid=a7b3cb3c-7150-49ee-b22c-1e56015a9be8sdc-v-sessmgr01&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ#AN=89088160&db=e
Food Industry Costs, Profits, and Productivity
https://www.ers.usda.gov/webdocs/publications/41035/15330_aer780d_1_.pdf?v=0
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