Second, getting the products in as many stores as possible is a subtle form of branding. If consumers see the items every time they go to the grocery store or the corner market, they may be more inclined to purchase them once the connection between the product and marketing is made. This is a somewhat nebulous term that describes to what extent a company has covered a given market. Stores with large footprints usually have a market well-covered. Generally speaking, companies with large footprints have less room to grow sales by opening new stores, while companies with small footprints can often grow sales quickly by expanding their store base.
Gross margins equal net revenues minus costs of sales.
Essentially, the COS equal all the expenses a company incurs to make its products. For most consumer brand companies, this means costs like raw materials, shipping for those materials, labor costs, overhead for factories, manufacturing equipment costs, and depreciation on manufacturing equipment. With so many factors affecting this item, it's difficult to say that any one component is critical. Investors should have some idea of what costs affect gross margins so they can estimate how various economic events will help or hurt different companies. Inflation levels affect a retailer's ability to set its prices, as low inflation levels will make any price increases seem larger relative to other goods and could cause people to shop elsewhere.