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Supermarket 1984 sales manual; an in-depth analysis of category performance.

After what seemed an eternity of continuous increases in food prices, retailers embraced the onset of disinflation a couple of years back with open arms. Their enthusiasm was justified, considering the awesome bottom line pressures created by a depressed economy. No longer having to content with rampant inflation and a lingering recession--conditions that had fostered fierce price wars--grocers could once again go on with the business of making money.

Unfortunately, that's not quite the way it happened last year as supermarket operators remained firmly committed to price-alashing tactics as a primary means of luring customers. The result: While the lowest retail food price hike in 15 years enabled the industry to realize "real" sales growth in 1983, the relentless use of price as a competitive weapon served to further aggravate profits. Halfway through 1984, the price wars continue unabated.

Despite a gloomy prognosis for a speedy turnaround from price-based competition, there are forces at work that are improving the supermarket operator's ability to control what happens in the store.

Scanning, of course, offers the retailer an efficient and expedient tool for fine-tuning his product mix, sharpening his merchandising strategies and pinning down every sales transaction that takes place at the checkout. With advanced software, grocers for the first time have a way to gauge the effects of advertising support, couponing, couponing, special in-store displays and other merchandising approaches on the products they stock. The fact that this data can be generated so quickly and with such precision makes it possible for retailers to modify activities while they're still underway, instead of having to wait until they find themselves backed against the wall, an all too frequent consequence of seat-of-the-pants operations.

Meanwhile, large scale programs involving all segments of the food industry are slowly, but steadily, beginning to fall into place. Thanks to sophisticated technology, for instance, many companies are now relying on computers to transmit purchase orders and invoices, eliminating the need for paperwork and marking the first steps toward a total electronic communications system.

While these developments offer considerable hope for a more manageable future, the current volatility of the industry places supermarket operators in a tough situation, at least for the balance of the year. Slow increases in food prices--which are expected to move at a slightly faster pace this year compared with 1983--not only make it more difficult for retailers to cover their fixed costs, but discourage many from intensifying their capital spending programs.

Clearly, grocers still have little to cheer about despite an overall improvement in operating conditions. And that's where the value of Progressive Grocer's 1984 Supermarket Sales Manual comes into focus. By providing statistical data on major categories, the industry has a single-source compendium of product sales, movement and profitability, as well as gross margins and percentages of department sales. The issue also puts the facts behind the figures into clearer perspective with incisive item-by-item analysis.

When Progressive Grocer assumed the rights to the data source Chain Store Age magazine previously used for this comprehensive report, it did so with the understanding that no single source can be completely precise. Rather, it is hoped that you find it interesting and useful reading that can be utilized as a reference source for the future.
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Publication:Progressive Grocer
Date:Jul 1, 1984
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