Supply and Demand of the Grocery Industry

There are several factors that can affect the supply and demand of the grocery industry. A few are income levels of households, strong sentiment of the stock markets, and the seasonal changes. The combination of these aspects all add up to the supply and demand of grocery stores.

                Income levels of households have a lot to do with people’s demand for grocery store products. As a result, the higher the demand for products the higher the stores will keep their supply and vice versa. Households regularly purchase goods from grocery stores but it is the disposable income that determines the quantity and quality of the goods bought. Statistics show that out of the eight different income categories buying from grocery stores, households earning over $70,000 make up just under 20 percent of the population. It’s simple to think about actually. The more money you make, the more you can and are willing to spend. But there is more than just income that affects the supply and demand of grocery stores.

                The stability of the stock market and the strength of the economy have a great affect on grocery stores’ supply and demand too. When the economy does well and stocks go up, people have more capital to spend on things like groceries instead of fast food. Now granted everyone like to go out to eat every so often, but thinking overall, people spend more money in grocery stores on food that can be cooked at home when they have the money to do so. This adds to the point again that when the demand rises for grocery goods, grocery stores increase their supply.

                One last affect, specifically on the supply grocery stores, would be the seasonal changes. When seasons change, different foods are being grown or stop being grown. When foods are being grown they are plentiful in stores. For example, corn grown in Pennsylvania flourishes in quantity around late July early August, depending on when it was planted. This means that during this time, stores in Pennsylvania will have a higher supply of corn than any other months, and, in turn, will increase the demand because people like foods that are freshly picked in stores. During the off months, most stores can’t sell corn because it goes bad and people jump on all of the newly sold corn.

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