Because my gross was good, my bottom line margin has risen. Much to my chagrin. We'll see what they say when we don't hit that number. We'll be with in 1-2% but I won't give them too much.
This is always a hot topic. I can only speak for meat shops as part of a supermarket, not free standing. Raised gross profit% requirements are only successful if sales are maintained. If raising gross profit% means less gross profit $$ due to less sales, then the strategy is obviously flawed. Every store should have an historic record of % of store sales Every monday meat mangers should first check their % of total store sales. Maintaining the departments "piece of the pie" is extremely important. This percentage usually drops because of: Poor customer service. Price Value for money (trim-bone etc) Stock conditions ON and OFF the ad
Conclusion-regardless of the reason for raising gross budgets, close monitoring of the above is very important AFTER raising prices, as is controling shrink. ps Consider the department mix, meaning contribution to gross profit per item, is also important after raising prices. The ad mix can be changed a little so slightly less tonnage items are in the mix
I'm in a very competitive market. We often invest gross to grow sales. Sales is the most important line to my company. They will not allow sales to slip.
Also, we are determined to be competitive on price so competition pricing drives our gross number.
