How to maximise shelf sales and profitability

Author: John Gordon

Abstract:

The paper, drawing on the experience of over thirty John Gordon Outlet Studies in various European retail situations, proposes that in order to maximise shelf sales and profitability a retailer must: 1. Examine current shelf profitability, taking into account not only sales and gross margins, but also the direct cost of achieving these sales. The result can then be expressed as Direct Product Profit per linear or cubic shelf meter, and can be used for comparisons between, or within, different sections of the store. 2. Direct Product Profit measurements, however, reflect solely the current shelf situation in the retailer's outlets. They do not take into account the potential based on outside marketing factors. This paper outlines how such a marketing audit should be carried out, linked to a total strategy for the section, and how the results influence the final layout plan of the section. The Outlet Marketing approach is illustrated from a U.K. Case Study on Health and Beauty Aids in Supermarkets carried out on behalf of a group of sponsoring manufacturers.

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