That was the question asked in a Planet Money podcast, which re-aired earlier this week.
The conventional answer was provided by the food writer Michael Pollan:
“I’ve come to understand the landscape of a grocery store as a brilliantly designed landscape to get us to buy as much food and as much expensive food as possible. So my general impression is that the milk is in the back.
And it’s - but - and it’s not just that the milk is in the back. It’s also usually very far from the bread. Both of them are very common items that everybody needs, and so it makes you cover a lot of ground if you want them.”
Another perspective was provided by the economist Russ Roberts:
“Russ thinks the reason the milk is in the back is practical. It’s easier to keep the milk cold if it’s there. The delivery trucks come into the back of the store. Milk goes right into this refrigerated room that’s often right behind the cooler where you grab your milk. No one has to lug the milk through the store to some cooler in the front.
ROBERTS: Milk spoils very easily. I was told that for every degree of temperature it rises, it loses a day of being available and being sellable. So the argument I’m making, which is kind of a radical argument, is that you and I want the milk in the back, even though it’s a little less convenient. If it were in the front, it would be more expensive, and we’re not willing to pay that extra price. So I think they’re actually doing what we want, not what they want.”
How can we know whose view is right? To answer the question, we'd need to observe a world where milk doesn't need to be refrigerated and then see where grocery stores - in this alternative universe - place the milk.
As it turns out, such an alternative universe actually exists! It's called France.
I spent part of 2011 on sabbatical and Paris, and when first grocery shopping I was surprised to find the milk often sitting right next to the laundry detergent or the cereal, unrefrigerated. How is this possible? For reasons that aren't entirely clear to me, much of the milk sold in France is ultra-high temperature (UHT) pasteurized. The process makes the milk "shelf stable" - it doesn't spoil when left unrefrigerated (I personally thought it tasted pretty terribly).
So, where do French grocery stores stock the milk? I only have anecdotal evidence based on my own shopping experiences, but by and large I'd say it was NOT at the back of the store. It was often situated somewhere near the center of the store. Moreover, some stores sold both UHT milk and "regular" refrigerated milk, and the refrigerated milk as typically at the back in a refrigerated case while the UHT milk was situated elsewhere in the store.
My take: Russ Roberts 1, Michael Pollan 0.
P.S. There is another line of evidence in favor of Russ's view. Where do you typically find (unrefrigerated) soy milk in your grocery store? In our local Walmart, it's in the center of the store, not at the back.