New Grocery SuperStudy: Magazines Yield 16.3% of GM True Profit

Magazines drive 6.4% of general merchandise (GM) sale, but yield 16.3% of true profit, according to the 2007 Grocery SuperStudy by Willard Bishop.

Consultant Thomas Griffith, Sr. will present study highlights at the Retail Conference at the end of March. Willard Bishop shared some advance findings of note to the magazine and book categories with Newsstand Forum:

• Within GM, books and magazines have among the lowest activity-based costs or ABC’s—10.4% and 13.2%, respectively.
• Center store (which includes checkouts, as well as grocery, GM, dairy and frozen) is more profitable than perimeter departments (bakery, deli, meat and produce). Center store generates 72% of sales, 54% of ABC’s and 88% of profit. Perimeter departments generate 28% of sales, 46% of ABC’s and 12% of profit.
• On average, retailers’ adjusted gross margin is 31% (including terms, trade and shrink) and ABC's are 21.7% of sales, leaving retailers with a 9.3% true profit margin.