Letters ABC have a special relationship with retail. For instance, there is a chain of grocery stores called ABC Stores on the islands of Hawaii, that sells delicious chocolate covered macadamias. They are so widespread in Oahu, that some people say that “ABC” there stands for “all blocks covered”. They are also pretty often photographed, and for that reason for some people it stands for “always bring camera”.
Another meaning of “ABC” in retailing comes from inventory analysis – it is a classification system often used for products sold at a store – those that are “Type A” generate the most revenue, “Type B” generate some, and “Type C” – would be some obscure stuff kept on bottom shelves. And while those macadamias are surely Type A for the Hawaiian chain, the question is what are the type A products for a typical American grocery store?
I was actually asked this question in class and as it happens the answer comes from Google. So here it is:
ITEM SALES ($B) % CHANGE
1.) Carbonated Beverages $12.00 1.86
2.) Milk $11.20 -8.44
3.) Fresh Bread & Rolls $9.57 4.77
4.) Beer/Ale/Hard Cider $8.17 5.42
5.) Salty Snacks $8.09 9.75
6.) Natural Cheese $7.64 7.75
7.) Frozen Dinners/Entrees $6.13 0.18
8.) Cold Cereal $6.11 2.12
9.) Wine $5.49 3.72
10.) Cigarettes $4.63 -2.18
for the period of 52 weeks ending June 14, 2009.
SOURCE: INFORMATION RESOURCES INC. (IRI)
A few more numbers to complement this data: according to the Census Bureau, the total sales of food and beverage stores over the same period were $550B, which gives that the top 10 categories account for 15% of the total. It is also interesting to see what retailers do increase their profit in these categories. It is well known that store brands carry higher margins, so it’s desirable for a retailer to introduce store brand into a large category. With some success it has been done for milk, bread, cheese, and cereal. But in the remaining categories national brands are still much stronger.
So it’s not quite chewing gum, Eric, but given that we are at Emory and in Atlanta, there is some pride in the fact that Coca Cola is up on top there.