Thread by @patrick_oshag

This book on the hard discounter biz model is very interesting. (Thanks to my favorite grocery expert @cristinagberta)

amazon.com/Retail-Disrupt…

Gross margins are 8 points lower for hard discounters vs traditional grocers but they make it up on costs (smaller cheaper stores, less labor, less central staffing, less marketing, lower logistical costs) so that EBITDA margins are almost 2 points higher.

Due to better working capital management, hard discounters also make better use of float (“free credit”). More float + a per store payback period that is HALF that of traditional grocers means they can open new stores aggressively and spread like wildfire.

Costs are kept very low.

-Items sold out of pallets/boxes
-shoppers deposits a coin to get a shopping cart and must return cart to get coin back, so no workers needed to manage carts
-have to bring your own bag
-no ads “our advertisement is our low price”