DIRECT PRODUCE PROFIT FOR SMALL AND INTERMEDIATE SIZE GROCERY RETAILERS

Michelle Roberts Blanchard and George K. Criner

Journal of Food Distribution Research, 1992, vol. 23, issue 3, 8

Abstract: Direct product profit (DPP) is a retailing tool used to analyze product sales performance. Although the concept is over 20 years old, its widespread use in grocery stores is a fairly recent phenomena. A product's DPP is calculated as its adjusted gross margin less its direct selling costs, which normally include transportation, warehousing, and retailing or store costs. A product's DPP and sales volume classifies it in one of four categories to assist in merchandising options. Fifteen small and intermediate size grocery retailers cooperated with a study of produce DPP. Based on weekly produce sales, the stores were separated into three groups. As store group produce sales increased, produce adjusted gross margin and DPP increased. Based on produce sales volume and DPP level, various merchandising strategies are suggested.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlofdr:26650

DOI: 10.22004/ag.econ.26650

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