Get 20M+ Full-Text Papers For Less Than $1.50/day. Subscribe now for You or Your Team.

Learn More →

Constructing a balanced view of profit structure in grocery retailing

Constructing a balanced view of profit structure in grocery retailing PurposeThe purposes of this paper are to propose a different profitability metric (i.e. anchor category profits) at the category level based on the concept of anchor categories and to illustrate how such a metric can be calculated in field settings to offer a balanced view of profit structure from both the accounting and marketing perspectives.Design/methodology/approachFirst, the concept of anchor categories is developed drawing on anchor effects theory and automatic cognitive processing theory. Based on anchor categories, this paper proposes a formula for calculating anchor category profits. Using the data collected with a survey instrument, this paper calculates accounting profits and anchor category profits for two grocery stores.FindingsThe intra-store analysis of accounting profits and anchor category profits reveals that the two profit measures project different profit contribution patterns by product categories for each store. The inter-store analysis provides quite different, yet useful information about profit structures for the two grocery stores. Although the two stores are similar in terms of accounting profits, their anchor category profits show different pictures regarding profit contribution patters by product categories between the two stores, revealing that different categories attract customers to different stores.Practical/implicationsComparing accounting profits and anchor category profits allows retail managers to identify traffic generator categories and cash generator categories, which helps retail managers develop more effective category management to increase storewide profits.Originality valueThis paper increases understanding of the relationship between product categories and store choice behavior by offering a theoretical rationale to explain why some product categories influence consumers’ store choice. This paper also proposes anchor category profits as a more implementation-friendly category-level profitability metric that combines accounting principles with consumers’ shopping trip planning behavior. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Research Review Emerald Publishing

Constructing a balanced view of profit structure in grocery retailing

Management Research Review , Volume 40 (7): 19 – Jul 17, 2017

Constructing a balanced view of profit structure in grocery retailing

Management Research Review , Volume 40 (7): 19 – Jul 17, 2017

Abstract

PurposeThe purposes of this paper are to propose a different profitability metric (i.e. anchor category profits) at the category level based on the concept of anchor categories and to illustrate how such a metric can be calculated in field settings to offer a balanced view of profit structure from both the accounting and marketing perspectives.Design/methodology/approachFirst, the concept of anchor categories is developed drawing on anchor effects theory and automatic cognitive processing theory. Based on anchor categories, this paper proposes a formula for calculating anchor category profits. Using the data collected with a survey instrument, this paper calculates accounting profits and anchor category profits for two grocery stores.FindingsThe intra-store analysis of accounting profits and anchor category profits reveals that the two profit measures project different profit contribution patterns by product categories for each store. The inter-store analysis provides quite different, yet useful information about profit structures for the two grocery stores. Although the two stores are similar in terms of accounting profits, their anchor category profits show different pictures regarding profit contribution patters by product categories between the two stores, revealing that different categories attract customers to different stores.Practical/implicationsComparing accounting profits and anchor category profits allows retail managers to identify traffic generator categories and cash generator categories, which helps retail managers develop more effective category management to increase storewide profits.Originality valueThis paper increases understanding of the relationship between product categories and store choice behavior by offering a theoretical rationale to explain why some product categories influence consumers’ store choice. This paper also proposes anchor category profits as a more implementation-friendly category-level profitability metric that combines accounting principles with consumers’ shopping trip planning behavior.

Loading next page...
 
/lp/emerald-publishing/constructing-a-balanced-view-of-profit-structure-in-grocery-retailing-pUNwvgZmX9

References (47)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2040-8269
DOI
10.1108/MRR-04-2016-0089
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purposes of this paper are to propose a different profitability metric (i.e. anchor category profits) at the category level based on the concept of anchor categories and to illustrate how such a metric can be calculated in field settings to offer a balanced view of profit structure from both the accounting and marketing perspectives.Design/methodology/approachFirst, the concept of anchor categories is developed drawing on anchor effects theory and automatic cognitive processing theory. Based on anchor categories, this paper proposes a formula for calculating anchor category profits. Using the data collected with a survey instrument, this paper calculates accounting profits and anchor category profits for two grocery stores.FindingsThe intra-store analysis of accounting profits and anchor category profits reveals that the two profit measures project different profit contribution patterns by product categories for each store. The inter-store analysis provides quite different, yet useful information about profit structures for the two grocery stores. Although the two stores are similar in terms of accounting profits, their anchor category profits show different pictures regarding profit contribution patters by product categories between the two stores, revealing that different categories attract customers to different stores.Practical/implicationsComparing accounting profits and anchor category profits allows retail managers to identify traffic generator categories and cash generator categories, which helps retail managers develop more effective category management to increase storewide profits.Originality valueThis paper increases understanding of the relationship between product categories and store choice behavior by offering a theoretical rationale to explain why some product categories influence consumers’ store choice. This paper also proposes anchor category profits as a more implementation-friendly category-level profitability metric that combines accounting principles with consumers’ shopping trip planning behavior.

Journal

Management Research ReviewEmerald Publishing

Published: Jul 17, 2017

There are no references for this article.