A Merchandise Management Analysis of Spar Supermarkets in Stellenbosch, South Africa

7070 Words Sep 17th, 2010 29 Pages
1 TABLE OF CONTENTS

1 INTRODUCTION 4
2 THEORETICAL DISCUSSION 4
2.1 INVENTORY 5
2.2 PRICING AND ASSORTMENT 5
2.3 WHY PLACE SO MUCH EMPHASIS ON MERCHANDISE MANAGEMENT 6
2.3.1 Interception Rate 7
2.3.2 Shopper Syndromes 7
2.3.3 Children as Shoppers 7
3 METHOD APPLIED 8
3.1 Direct (Reactive) Observation 9
3.1.1 Continuous Monitoring: 9
3.1.2 Time Allocation: 9
3.2 Unobtrusive Observation 10
3.2.1 Behaviour Trace studies: 10
3.2.2 Disguised Field Observations: 10
3.3 Conclusion 10
4 OBSERVATIONS 11
4.1 Private Labels 11
4.2 Space 11
4.3 Placement 11
5 OBSERVATIONS 12
6 INTERPRETATION OF FINDINGS 14
7 RECOMMENDATIONS 18
8 CONCLUSION 19
9 Bibliography 19

2 INTRODUCTION

Merchandise management is one of the most important aspects
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The basic unit of analysis for making merchandise management decisions is the merchandise category (Levy & Weitz, 2009), these are groups of items and brands that consumers see as direct substitutes for one another, and for example different brands of milk cheese make up the dairy category. These categories can be managed either by category or by brand; both of these approaches have advantages and disadvantages. The advantages of category management are that management can ensure that the category containing the best combinations of vendors or brands and sizes.

Store layout with regard to merchandise has a direct impact on the positioning of the store. The retailer needs to decide how much store space to allocate towards a specific product category and how much space must be allocated towards isles and advertising space. This is especially important with regard to seasonal products such as Easter Eggs or other Easter merchandise. The differences in the placement of these seasonal items between the different Spar shops will be used to determine the difference in sales of those items.

3.1 INVENTORY

Increasing inventory turnover is a cornerstone to improving the sales volume and therefore the net revenue of the retailer. Inventory turnover is especially important for perishable goods such as fruit and vegetables. This is because these types of merchandise quickly turn bad and get damaged after being handled for too long or from being under the

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