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Also, Gerber's market presence is ubiquitous, while both smaller firms outlay significant amounts of "fixed trade spending" to compete for supermarket shelf space. "Fixed trade spending" (also referred to as "slotting fees" or "pay-to-stay" arrangements) are cash outlays to distribution outlets (e.g...
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supermarkets) in order for a company's product to obtain shelf placement. Gerber does not pay out any of these types of fees, because of dominance in the market, and the inherent profitability for stores to carry its products.
Based on the above facts, many factors are strongly in place that would require very significant financial outlay for a new firm to have significant competitive presence based on the nature of the current industry...
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