Certain cash and carry establishments are specifically targeted to the foodservice restaurant market and are also cross marketing their quick in-out convenience to expand their mark to consumers. If convenience and low cost are the key drivers of the foodservice industry why have these firms not shut down regional distributors?

The answer is simple to anyone that has significantly utilized both of these supply sources for their foodservice products. Here are some key reasons that your foodservice distribution company can easily rival the low price advantage. Based on your distributor pricing you should be paying either be equivalent or only slightly higher prices for similar use food supply items. Low product sales price does not equal low acquisition costs or ultimate revenue return value from that purchase option.

1 - When Time is Money
Once you've reached that point in your restaurant's management that time "in your restaurant" establishment is more important to your success that "getting away" you'll choose distribution over cash and carry for this fact alone. Assuming a regular order size of $500-1500 those 2 hours outside your restaurant not specifically allocated to revenue producing activities and labor management will certainly cost you more than any possible cash and carry trip financial benefits. If you are purchasing over $1500 and are not just buying coke syrup and canned soda (the traditionally lower cost cash and carry type items) you certainly would benefit from the delivery of this quantity of products. So when time becomes money - most operator begin depending on a foodservice company vs a cash and carry option.

2 - Product Availability
Simply put, if your cash & carry retailer is out of a critical item (they often are due the their role as a backup and last alternative source) you likely be spending the rest of the day begging another supplier or restaurant to bail you out. I've been there... There's nothing like running all morning to every Smart & Final in town to get enough 18/22 bacon to make it through lunch. Foodservice distributors make a bad choice as a backup for cash & carry. Most distributors will make you pay for the extra work through higher product costs (maybe not today or tomorrow but it will happen) - especially if you are asking a DSR to perform an emergency food run to your restaurant. However, Cash and Carry is an excellent backup in case your foodservice supplier has shorted you on an item that you could not keep enough inventory for to make it to your next delivery. As a side note - let your DSR know you don't expect them to run to the market for you and that you'll have an employee stop by on their way in to work - you just earned a major special price next week on something you order.

3 - Product Quality
Cash and Carry club centers are popular for low price. There are many grades of products and if you want the cheapest case of green beans - your distributor can easily match this value line quality level at the local cash and carry outlet. Distributors have a hard time getting carnival and special one-time or tourist type restaurant business because the proprietors often down care about the food quality because no one is ever coming back anyway. If this is you, and you plan to be around next year - people do come back eventually, and the locals will certainly tell other tourists the good and bad about your food.