Not necessarily selling below cost. They can save money in all sorts of ways:

• charging brands to put their products in the best shelves
• fridges and shelves with ads and product names (often provided for free by the brands)
• bigger sales volume reduce cost of storage, reduce amount of expired products and as you said, also guarantee a better price when acquiring the goods.
• they have much more data on what sells at what price
• they know very well what kind of products people will check the price for and which ones they'll just buy in whatever store they are already at (so they put a lower price on product X to get people in the store and then a higher price on product Y to cover for it)
• they own multiple store brands, with different price ranges, so they can make one store generate profit for both of them similarly to the previous point.
• they do all sorts of sketchy stuff to get tax breaks, insurance claims and other stuff that may have give them some money back
• they may sometimes move products between stores to sell everything that might be expiring soon
• they have their own product brands that they can save money on
• in some places they may re-package stuff to artificially extend their shelf life.
• probably a lot more stuff I never even considered.