Arizona republican., 1922-04-04
MERcANTILE PAPER
COST Of SELLING
MEAT THROUGH
RETAIL STORES

The cost of selling meat through
retail stores is nearly double what
it was in 1918, or $50 cents per
pound in 1921 as compared to 3.ly
cents per pound in 1913, according
to a survey just completed by the
United States department of agri-
culture.
The cost of retailing meat In all
types of stores in 1919 was found to
be as follows: OF each dollar
spent by the consumer for meat,
81.l4 cents was spent by the retailer
for meat at wholesale. 1857 cents
represented the expense of retailing,
and 229 cents the retailers net
profit.
This Investigation is one of SER
les dealing with the cost of distrib-
uting foods to the consumer and
covered 80 cities with S.507 retail
meat stores. Complete accounts OF
over 400 stores were analyzed for
the year 1919 and supplementary
studies were made for 1921 by Her
bert C. Marshall of the bureau of
markets and crop estimates.
The net profit of retail meat dis
tributors averaged 2.29 per cent of
sales for all stores, being FIT for
individual stores and 3.39 for chain
stores. There was a wide range Of
net profit shown for stores of vari-
Gus sizes, ranging from about 2 per
cent of sales for those doing an
annual business OF less than $4,000
to an average of 2.75 per cent of
sales for stores doing a business OF
100000. The net profit for carry
stores was 2.25 per cent OF sales
compared with 2.13 for delivery
stores.
Since the returns of the manager
owner of the small one-man shop is
in the form of both net profit and
wages the exact percentage of each
of these cannot be accurately deter
mined but must be divided some-
what arbitrarily. The allowance for
a. one man store with an annual
sales OF $4,000 per year is per
cent for salary and wages or $1,000,
and additional net profit of 2 per
cent of sales which gave this dis
tributor approximately $4,000 net
return in 1919. He received interest
on his investment in the business
in addition. For concern with
sales Of 5000, 900 with a staff of
about ten employees, the salary of
the manager owner is placed at
$4,000 and net profit of 2.75 per cent
of sales, making a total return OF
approximately $4,000, in addition TO
which he received interest on his in
vestment in the business.
The survey shows the difference
in operating expenses between carry
stores and delivery stores to be
about IL per cent, or less than two
cents per dollars worth of meat sold.
The actual delivery expenses for all
delivery stores was found TO be 2.6z
cents per dollar Of sales. From these
figures it appears that in giving
delivery service there can be
slight saving in some other ex-
penses.
In n individual markets for
which a special study was made of
the expense of delivering the meats
actually delivered. the expense was
found to be 6.72 per cent OF the SELL
ing price of the goods delivered,
whereas the delivery expense when
spread over total sales was only 2.62
per cent as stated above. In deliv-
cry stores only about 40 per cent OF
the goods are delivered, the rest be-
ing carried. but all share in the ex-
pense of delivery.
The average margin on meat sales
of the II chain store systems was
1885 per cent OF sales, the same as
for individual meat markets. The
chain store systems had lower oper-
ating costs, particularly in the item
of wages, their net profits averaging
more than / per ce/ higher than
the individual meat markets.
The rapid growth of chain systems
in recent years is an indication that /
they are found more profitable than
the individual stores. In the four
years from January l. 1917, to Janu-
ary l, 1921. ten large systems showed |
a growth from a total of 406 stores
to 1857. the increase in the number
handling fresh meats in these sys-
TENS being from 266 to 591.
Operating expenses and gross mar
gin were found to be appreciably