Question

Why is milk in the back of the store?

Listen to EconTalk for an interesting discussion about why things are the way they are in the grocery store. Have you ever wondered why milk is in the back of the store? Is it so that the store makes you travel past all of the high-profit items to drain more money from your wallet? Or could the reason be due to fixed (or variable) costs?Another discussion taken up in the podcast is why take-out items at restaurants are cheaper than dine-in. A related question would be why are similar items on the lunch menu cheaper than on the dinner menu?I like this podcast for three reasons: 1) it gives you a lot of examples of how economists look at things, 2) it demonstrates how the issue of internal firm costs (and production) affects the visible behavior of firms, and 3) it provides counter-arguments against the "companies are just out to rip you off" line of thinking. How persuasive do you find these arguments?

Answer 1

Solution. An economist always thinks with a view that if there is a question there has to be an answer and those have to correlated, which is not necessarily true. However one of the general perception is that milk is one of the most common thing that most of the buyers look for and if it is kept at the back side, customer will go through more goods and might buy more or remember something that didn't come to the mind when doing the shopping.

Above is one the reason explained through data analytics as well. Everything at the store is kept in combination to attract customer. Historically, however, it started as milk has to be kept cold and trucks transferred milk gallons from the back side, where it is kept in the cold room.

Nowadays more analytics has been done on placing of things and in some store milk is found at the side with the combination of banana or bread or butter.