Mergers have sharply consolidated supermarket ownership in recent years. Regulators are watching with concern. Three federal investigations into slotting practices are underway, but fear prevents many food makers from coming forward. Retailers have so intimidated suppliers that witnesses at a recent Senate hearing on slotting wore hoods to conceal their identities. Like Hollywood accounting, the economics of slotting and grocery pricing are shrouded in mystery, fueling the debate on the system's ultimate effect on consumers.
Critics also say slotting results in less variety on store shelves.
What's more, many supposedly competing brands are actually controlled by the same companies. A success story such as Nancy's Quiches, started in the founder's Bay Area kitchen, would never happen today, she said. Retailers say that slotting simply makes manufacturers shoulder part of the risk in introducing new products, most of which fail. If the product is a hit, the supplier can boost wholesale prices to offset slotting costs, they say. If not, the fees cushion the retailer from losing money.