Costco vs. the Lean Corner Store

A while back I somehow ended up with a Costco card, but I have never used it.  I don't necessarily have anything against the store, it's just that I don't need to buy in bulk.  In fact, I rarely have to buy, period.  My wife and I have pretty busy schedules, and often meet for dinner out.  In an effort to reduce a ridiculous amount of eating out, we've recently begun to have some meals brought in.  A small luxury perhaps, but it saves a lot of time.  When I do cook it usually takes about six trips to the store just to obtain all the ingredients to grill a slab of salmon.

Although overall I'd say we tend more toward the frugal side, I realize we're in the minority with regards to meal habits.  In fact, as gas prices go up, trips to the store are going down.

Until two years ago, Natalie Stone paid twice-a-month visits to her local BJ's Wholesale Club in Greenville, S.C., to buy paper towels and toilet paper for her home, meat for the dinner table, and diapers for her son. Often, during the week, she would also swing by her local supermarket for items she'd forgotten. But rising gas prices and other budgetary constraints have killed off such side trips. "Now I go to BJ's just once a month," says the 29-year-old homemaker.

This change is becoming more prevalent.

The confluence of high food and gas prices, slumping real estate, and the credit crunch has left the Stones and millions of other middle-class families feeling pinched. That has major implications for the nation's retailers. As consumers get more anxious and more organized about where and when they shop, they're drawn to Wal-Mart Stores, Costco Wholesale, and the like. "We're seeing some clear changes in consumer behavior," says A.G. Lafley, CEO of Procter & Gamble.

So much for demand-flow, pulling from the customer just the amount needed.  So much for one piece flow in the pantry.  So much for lean grocery shopping.  Where do people store a month's worth of food for an entire family?  Our pantry isn't that large, or at least it wasn't the last time I checked.  But we've done quite a bit of remodeling since then, so perhaps it has changed.

Earlier this century when I started my own contract manufacturing company I wanted to drive home that lean manufacturing isn't just for the shop floor.  So I enforced rules for the purchase of shop supplies, office supplies, and equipment just when they were needed, in the exact quantity needed.  Everything was kanban'd.  Including toilet paper.  I thought it was brilliant... if the extra roll was still on the shelf, all was good.  If not, time to go buy another.  My administrative assistant was not impressed.  As you may imagine, an exception to the rule was created the next day, although I guess we could have just increased the size of the TP kanban.

However I believe there could still be hope for the lean pantry.  Instead of making once monstrous trip to the local Costco, how about looking for alternatives?  Not the overproduction of leftovers or multiple runs to the large big box store.  Although large stores are becoming more prevalent, much of the rest of the world enjoys a luxury we don't have in North America: the tiny local store on the corner of seemingly every block. Just the staples... a short distance away in just the quantities needed.  Go and get just what you need for the day.  For some reason those stores just never took off in modern America.  So much for the lean pantry. 

I think I'll stick with eating out.  It's much easier.

Comments

[Mike Gardner]

Do the same economic forces that apply to business apply in the home? I don't think so. For example, why do I care how much floor space I use to store food or other essentials in my pantry, garage, or basement? I am not going to put some kind of "value added" activity in that space. In fact, the fact that I have a pantry or storage area for these items is value added for my household. By the logic of lean, I would never can or freeze vegetables from my garden because there is no "pull." I batch everything in the late summer and early fall for use throughout the year. I shouldn't buy half of a steer from a friend at about $3.00 per pound and freeze it because it isn't one-steak flow? I think this is a case of apples and oranges.

[Dawn]

Kevin, with respect to why the tiny local stores never caught on...it reminded me of a spot from a documentary I just saw recently...(regarding corn production...King Corn...http://www.kingcorn.net/ (talk about overproduction...but that's a whole other discussion!!!)

This question of what American consumers think is 'value' came up. There was an interview with one of their 'experts' about the American culture (and why we buy the way we do)...the statement was (and I am paraphrasing)...

'Americans place value on quantity over quality. The larger the available amount at a seemingly low cost is what is drives American's to buy.'

So, how did we as society come to this 'value' definition? And how do you teach society to see the benefits of buying lean (and the downfalls of society's individuals becoming "off-site inventory warehouses" for the mega-stores)?

If you get a chance...check out the movie's info. It's all about U.S. government-subsidized overproduction...the amounts were staggering!!!

Dawn

[david foster]

"Americans place value on quantity over quality. The larger the available amount at a seemingly low cost is what is drives American's to buy"...I think this is a silly statement, and is inconsistent with the success of businesses like Starbucks and Whole Foods.

In general, I notice that when people say "Americans are X" or "Americans do X," where X is something negative, they generally don't provide any evidence of having done a cross-national comparison. Is American propensity for quantity at a low price greater than that of a Russian? A Frenchman in Paris? A Frenchman in Lyon? An African?

[Andy Wagner]

I deeply regret my last trip to Costco. My wife and I became members to buy cheap diapers for baby to be, (she's due in June. :)
Our first trips consisted of buy a few things that were genuinely practical. My wife uses sun-dried tomatoes, for example, in everything, and the come in large cheap jars only at Costco. We got a great deal on back-up drives for our computers.
We mocked the place as we cruised the aisles. Conspicuously consuming Americans in the batch and queue SUVs with their batch and queue groceries. Ah, my kingdom for an appropriately sized vehicle and and a kanban friendly "supermarket"!
Then I got the coupon book...
I now own a ten year supply of liquid soap... and glass/window cleaner... dish washing soap.

All that cleaning material, and yet, I feel dirty, somehow.

A reminder that even in my personal life, lean is a journey, not a destination.

[Mark Graban]

What is "lean" grocery shopping? Sticking blindly to an ideal of one piece flow? Or optimizing total cost?

If you're insisting on lots of trips to buy small quantities (especially since small corner stores don't exist in suburbia), you might be suboptimizing one part of the equation (inventory cost).

Lots of trips = more gas = more $$$.

Maybe optimizing total cost means buying in bulk. I wouldn't denounce the practice out of hand.

I always use this example in Lean training... when living in suburbia, I don't drive to the store every time I want a Diet Coke. I buy a 12 pack. There's time and expense involved in going to a store and I have storage space at home.

If I were back in Boston living in a tiny apartment above a store, I'd buy in smaller quanitites.

[mike]

I think weekly trips to the grocery store(s) is pretty average around here. The problem is people buy multiple month long quanities of certain items at a time.
Another huge problem is the store specials and coupons. Alot of people buy huge quanities when teh prices are low. I'm not talking seasonal specialties but huge price fluctuations from week to week.
Lastly there is somethign to be said for having sizable stocks of food on hand for emergencies or long disasters, though that would include more of nonperishables than rotating perishables.

[Barclay Rockwood]

ATTENTION UBER-LEAN GUYS:
~~when your only tool is a hammer, you tend to see all problems as nails~~

Pantries (inventory) at home are designed to hold safety buffers.

The reasons are:
* to save time (running down to the store before each meal)
* save gas (running down to the store before each meal)
* to reduce futility (the store is closed)
* preparation for emergencies or inclement weather (stores may be closed outside their normal hours for extended periods)
* thousands of years of DNA memory that say 'stock up food if you can!'

Applying Lean to the pantry is a solution in search of a problem.

Why not lean 'sock drawers'? You know the type: when you need a pair of socks you pull from the laundry and wait for the wash/dry cycle...unless of course you have a dreaded inventory buffer of a few pairs of socks!

[mike t]

I have to disagree with teh local staple stores not beign available in north america. I have a convience store with the basics and two gas station stores on my road alone and i live within 3 miles of 4 million square feet total of retail including most of the magor big box store chains.