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I I - ‘ .‘I: If: J,” ~‘ ‘ V 1 (-l A.” 1 . ,3- ‘ L......1_-.._-._.---_11' L Taliban... - .m-_~‘d.‘,' ‘2' ‘.‘ H. ‘1 .t" ‘ .3 wait (an. mm ; "1‘1‘1 ‘l. H HI'W' ‘ ~.~- R5 lk‘21-~\'11‘1 1“,“;- 1 , ' l O" ‘1’! , , _'l-. " I HUI»! «Hwy, ‘LI‘IU‘ ’\_ ’_, . ; ”Wu " ‘7 ; / , / ‘ “(I ._~, I I' h I 'l “ 1,. v," f , y; _ “7 3/ 0', . 5‘ I‘ I "3 On‘ \ ’ (/ " 7;; : « Mas-c a, PLACE IN RETURN BOX to remove this checkout from your record. TO AVOID FINES return on or before date due. DATE DUE DATE DUE DATE DUE MSU Is An Affirmative Action/Equal Opportunity Institution c:\cIrc\d¢eduo.orn3-p.1 ,. |L—Q‘S Kenneth J. Eeis A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degnee of MTK‘. MASTER OF BUSINESS ADMINISTEAilUN Department of Mayketing and Transportation PREFACE I have made many false starts on a project calcu- lated to judge the profitability of the frozen food depart- ment. I had hoped to show that in a given circumstance the frozen food department was profitable. My original plan called for a case study of a few selected stOres in a large Midwestern chain. Tentative agreement to cooperate was received from the chain. until the large scope of the project was real zed. The gentleman from wnom I had hope” to gain alT relevant infOrmation was perfectly frank in admitting he did not have the staff nor the time to conduct the rather thCituudi study I'ruri envisioned. I have, then, devised a strategy for effective nmrchandising of frozen foods from what I consider a more realistic approach than that taken by most managers. By realistic I mean more useful for managers in their individual situations. I would like to express my gratitude to the following persons for their generous assistance in contributing to 'UMBCOmpletion of the study: Dr. Edward M. Barnet, Director ofifiograms in Mass Marketing Management at Michigan State Ikdversity; Assistant Professor Taniel Slate, Michigan State Ihflyersity; Mr. Charles Crossed. United States Department of Agriculture, Marketing Economics Division; Miss Catherine ii McAndrews, Manager—-Information Service, Super Market Institute. Inc.; my classmates, especially Mr. Adrian Vannice and Mr. Tom Neal of The Kroger Company; and to the many companies and other individuals who have contributed information. I feel deeply grateful to my company. Red Owl Stores, Inc. for providing me with the opportunity to do this research. and especially to Mr. Robert Peinfeld for his pointed questions and observations. I wish also to give special thanks to my wife, Kay, for her patience, cooperation typing ability, and general inspiration. iii TABLE OF CONTENTS PREFACE ITST OF TABLES Chapteli I. INTRODUCTION. II. DEVELOPMENT OF FROZEN FOODS. III. NET PROFIT DETERMINATION. IV. MARKET ANALYSIS. V. SPACE ALLOCATION VI. SUGGESTIONS FOR PROPER MERCHANDISING. VII. SUMMARY AND CONCLUSIONS TWPENDIX A--Computation of Direct Costs. .MWENDIX B--Computation of Indirect Costs ADDENDA BIBLIOGRAPHY} iv Page ii Table (m U“ 4 TO. 11. Production Comparison of Frozen Foods . Frozen Foods: Per Cent of Store Sales. . Extent of Over—ail Usage . . . . . . Frequency of Servings . . . . . . Frozen Vegetable Sales. Five Months--1960. Quality, Health, and Cost Comparisons . Perception of Frozen Food Quality Now Compared to When First Used . . . . Perception of Frozen Food Prices Compared to When First Used . . . . . . Attitudes Toward Using Frozen Food When Economizing on Food Biii . . . . . Progressive Grocer Frozen Food Expense Analysis. . . . . . . . . . . Gross Profit and Net Profit Comparisons for Selected Grocery Items L—J +— y“ x] (J KI.) P (L) Personal observations indicated that store managers rmglected the frozen food department until the grocery dmmutment had been put in reasonable order. Such actions nmant that few facings in the frozen food case were full gum valuable sales opportunities were probably lost. Obser- \mtions were made of some castomers bending and stretching U2get a last can of orange juice from the cabinet. but Iiequently they would rather_go without than go through the contortions necessary to get the last can. Neglect, then can cause not only low stocks but also customer irritation vddch, if not detected anc remedied, will have detrimental effects on the store. Because observations were limited to stores of only one chain, the value of this study may be seriously limited. It is believed that the managers of this chain are repre— sentative of most managers and most managers act in substan- tially the same way. The point is. frozen foods are being neglected to varying degrees by some managers, assumed to be representative of the whole group of managers. To the extent the neglect situation is true in the particu”a" instance, it is assumed to be true in most instances. l Problem The problem is how to formulate a better merchan- cfising strategy for frozen foods by developing in the nmnager a consciousness of operating costs and market characteristics. The reluctance of stOre managers to accept fully ifim frozen food department might be attributed to the cmmmn belief that the department is unprofitable. Such miaccoss-the-board statement grossly underestimates the {mtentialities of the department--potentialities that could beiudlized to make profits. The preconceived and erroneous rmtions about profitablity stem from the position of frozen foods during and after World War II when, in actuality. there vmre no profits. The manager thinks he carries frozen foods merely as a service for the customer and not as a cont ibu- tion to his net profit. It is his idea that as long as he is not getting anything out of the blankety-blanx department he is not going to put anything into it. Because of this belief too many managers and chains lack an effective strategy for promotion of frozen foods. The strategy to be develOped here is meant to be applied by the store manager in his individual situation. However, utilization of the study is not limited solely to store managers but, in fact, can be adOpted by personnel at headquarters. Responsibility for setting the tone of frozen food merchandising rests with headquarters personnel. If H fl the "Oifice does not think frozen foods are worth promoting, 3 then the store manager is hard pressed to put an agressive sales program into action. It is assumed that many managers do not have a realistic idea of what they are putting into the department. At the present time there is little in the way of a simple method for allocating operating costs to the frozen food department, particularly on a per item basis. Traditional methods View frozen food as a department and entirely neglect the indivifual items. Traditional methods assume each item takes an equal amount of operating costs. an idea this paper hopes to dispel. Cost consciousness on the part of the manager, to- gether with a knowledge of market characteristics is an integral part of any merchandising strategy. Cognizange 0? these two areas is essential to Formulating any kind of per unit space allocation which, in turn, must be the foundation of any effective promotion. Objectives The first objective of the study is to define the past and present problems of frozen food merchandising. In Chapter II a brief review will be made of some essential historical background in order to set the stage for a dis- 1’ \ tussion of the stagnation of frozen Food sales. Previous to 1956, frozen food sales increased at a rapid rate, but since then have leveled off at about t.O% of total food sales. The frozen food industry, once destined for gigantic prOportions, has suddenly stopped growing. a The first of several causes contributing to the CO stagnation of frozen food sale is lack of customer accep- tance of frozen foods. Perhaps the consumer does not like 13w quality of frozen foods, and therefore, will not buy them. If this be the case, a program to educate people on \ 1am degree of quality inherent in quick froosn foods is I long overdue. The degree to which the consume? will substitute :szen items foc canned or fresh is an extension of the {noblem of acceptability. An attempt will be made to dis- amms whether or not the in ustry is Faced with a p oblem of latent demand which must be uncovered. Another prob em Fanin$ the indust y is the degree lities to sto e lawge quanti- H- M)which the consumer has fab ‘l mes of fro en food. In oyde“ to preserve the quality in— (\l tfirent in frozen foods they must be stored at 00 F. at all times. ‘Lhnited freezer capacity would most certainly‘stifle ablume purcnases of frozen items. One problem which is on the way to being solved is the absence of decent display cases. The cabinets presently being used offer little in the way of eye-level merchandise appeal to the consumer. Some manufactuxers of re cigeration 7‘ equipment, notably Hussman Refrigevation an? gler Refriger- ation, are producing limited quantities of a new triple—deck case which would eliminate the problem. :1 Having at least become aware of the problems acing the industry. a second objective will be discussed, namely, to formulate and describe a better method for computing operating costs. It is €elt one reason the department is neglected is that managers and chain personnel do not have an adequate method to measure net operating profit. Managers need to know the net operating pcofit not only of the department but also per item. By breaking down costs and profits to a pe~ item basis it is hOped store manage s will be able to make better decisions concerning display and spa e allocations. In using an item comparison the operatOr can see whether additional promotional costs pay FOr themselves in terms of increased sales of an item, or pe~haps increased volume of the Cepartment. The third objective is to describe types of marwet hfiormation and to list so; Hes of such material available UDa manager. Without an a quate knowledge of the people hibis trading area the manage” might well mane gross errors hipromotion. A sophisticated statistical analysis or the ma Ket need not be made in o dew to obtain the type o? MHOWl‘ edge necessary. There exists a vast availability of source material for just the general information that is needed, out only some of the relevant sources will be discussed. The next objective is to demonstrate a space allo- cation EOrmula that integrates the criteria of cost con— sciousness and market Knowledge. Of prime consideration in any space allocation should be the overhead cost attributed to the space together with the labOr cost allocated to the fl \4 item occupying the space. Once a base space per item has "I been ascertained it must be adjusted in terms oi the demand of the market for the item. The quantitative criterion of costs will be combined with the qualitative criterion of market characteristics to arrive at a woraable and efficient formula to be used by the manager. The last objective of the analysis of an effective nmrchandising strategy is to suggest techniques for prOper "b merchandising Oi frozen foods. A focus will be drawn on techniques having sufficient flexibility to adapt to changing times and markets. Some of the topics to be covered include advertising, display, and proper handling. The objectives rank as a summary of the merchandising smategy being proposed to managers and chain personnel. It istmped the strategy leaves far behind the trial and error emproach now used by most frozen food men. jflmothesis It is hypothesized that Knowledge of the effect of operating costs on net profit and an awareness of market characteristics combined with proper display techniques will demonstrate to the store manager possible areas of neglected net profit contribution or loss reduction, and hence, will benefit the store manager in formulating a strategy for merchandising frozen foods. In order to clarify the hypothesis it is deemed nec- essary to define some of the terms. Perhaps the term which would be subject to the most controversy is operating costs. For purposes of the paper, operating costs are defined as the costs of doing business, measured by the store manager as actually occurring at store level. Thus, costs such as warehousing, freight and trucking, and administrative are not included in operating expenses.1 Operating expenses include noncontrollable and cOntrollable recurring costs. Noncontrollable costs, from a store manager's vieWpoint, may be charged either in con— stant dollar amounts each operating period or in constant percentage of store volume. Rent or occupancy charge is an example of a constant dollar amount deducted on the store dvertising Or 93 Operating statement. Other costs such as trading stamps may be pro-rater on a constant percentage of store volume. Controllable expenses are those costs upon which the manager can have direct influence, and include labor, supplies, and in some cases, utilities. For the purposes of the paper, Operating costs will a be divided into direct and indirect costs.5 1The significance of this omission will be explained in Chapter III. 2The meaning and significance of direct and indirect costs will be explained in Chapter III. Net profit is to be taken as gross profit less 4"! operating costs defined above. In terms oi the previous definition this is net operating profit but for the purpose of simplicity will be called net profit. Awareness of market characteristics is merely a state of being informed about the wants and desires of the people in the trading area of the sto e. Methods The method chosen to accomplish the objectives and to verify the hypothesis is an historical approach, supple- mented_wherever possible with direct sources. A number of reliable sources have been drawn upon in order to combine separate ideas into an integrated workable program for the manager.‘ Sources include personal observation to a certain degree, but, more emphasis has been placed on the use of food industry magazines and newspapers and an interpretation of the material therein. Summar‘ The study deals with f'OI'm‘..,1l£J.tink§ an ef’fective strategy whereby the stOre manager will be better able to merchandise frozen foods. The degree to which the manager must be conscious of operating costs and market character- istics will be stressed. With a basic understanding of what is preposed one may now proceed to the body of the report. CHAPTER II DEVELOPMENT OF FROZEN FOOD In order to understand the position in which the store manager has been placed it is necessary to understand the decelopmental problems of the frozen food industry. The objective of this chapter is to define past and present problems of the frozen food industry. HistOrically it is believed that man became aware of freeZing flesh foods when he moved from the warmer areas of the world to the colder nOrthern climates. There is even some historical evidence that Egyptian Pharoahs were fond of frozen desserts, going to such extremes as bringing . , , 'I , 4i _ _ ' _ O ,_ i snow for freezing purposes from the .ar away mountains. 4 Less than one hundred years ago slow freezing by artificia means was used on fish, poultry, and some meats. The present .ay development of artificial freezing of fruits and vege- tables was only started in 1925, by an enterprising man , 2 named Clarence Birdseye. 1Robert A. Froman. "Ice Cream--Sundae, Monday ano All Ways," Colliers, CXXVII, No. 23 (June 9, 1951), ' i 2 . "Tribute to Clarence Birdseye,‘ QuicK Frc:en Foods. XXII, No. 8 (March, 1960), 3l9. 10 The artificial method of freezing perishable foods pioneered by Mr. Birdseye was a system of quick freezing by pressing the packaged goods between twa refrigerated metal belts. Though the scientific principles of quick freezing had long been known, no one had ever thought of using the process to preserve the tOp qualities of a fresh pro/uct. Mr. Birdseye, an avid fisherman and noted hunter, noticed on one of his trips that fish frozen in minus thirty to forty degree weather, when thawed and cooked were as tasty ”2 as the fresh product.4 This was in 1923. After much research and experimentation he developed plans for a small belt froster which, by 1926, had grown into a twenty ton quick freezing machine. Birdseye began shipping bulky packs of frozen fish to the Midwest and he also kept on experimenting with fruits and vegetables. Business was generally bad because people associated frozen foods with cold storage food whose flavor was so bad that customers shunned it. A good job of educating the public about the advantages and quality of frozen foods was sorely needed and was, to a certain degree, implemented by Mr. Birdseye. In June, 1929, Clarence Birdseye was able to sell the patents and assets of his fledgling company to the Postum Company which recognized the potential of this infant in us- try. On March 6, I930, quick frozen food was offerec to U0 ll America for the first time in retail stores in Springfield, Massachusetts, just thirty—two years Behind a tumul- ago. tous forty week advertising campaign, Birdseye launched twenty-seven different products in ten stores and, in the \L) ‘3A, the , C‘ following ten months, sold 80,000 packages.u B” l young Birdseye business was deep in debt and deeply bogged down by a distribution problem. The first step and ultimate solution to the problem was a cut in retail prices in Order to develop a greater volume of sales and to gain economies of distribution. As a result of the action the company began to move into the black. It was not until l9AO. at the end of the depression. that the Birdseye Company began national distribution. Shortly thereafter, an all out war effort by the United m tates drew a great percentage of the homemakers into defense plants and. in the search for quick meals, frozen foods same into its own. However, the era was not one of complete suc— cess because it also gave birth to many unscrupulous oper- ators who saw in frozen foods a chance to make a quick dOIlar. The guileful operators inCiuded processors, distributOrs. and retailers. The whole operation was new and no one knew quite how to sell the merchandise in an effective manner without taking undue advantage of the consuper. As a result, many Operators thought it perfectly permissible to sell frozen foods from a non-refrigerated display, Pictures can be seen “ibld., 324. l2 of operators holding "frozen" food sales in front of the store in midsummer. What equipment there was, was not cared for properly and, as a result, both the equipment and the frozen products deteriorated. But, in spite of the abuses and poor customer relations, the industry grew from an output of 325 million pounds in l939, to over 6.5 billion pounds in 1959. Table l delineates the production compar— ison in the last decade. lAELE l PFODUCTION COMPARISON OF FBOZE (In millions of pounds) Frozen Foods l949 l“59 % Increase Fruits 360 El? lTl Vegetables 590 l,t2€ 276 Poultry 200 1,7A? 370 Meats so goo coo SeafooCs l6§ 475 290 Prepared Foods j: 700 2,000 Concentrates llo l,095 7%2 Total 1,516 6,555 43, Dollar Value Total (in millions) $37: $2,7Ao 7;,% *Source: "lQEO Frozen Food Almanac," Quica rrozen Foods, XXIII, No. 3 (October, lQCO), lfO. Stagnation In the past few years frozen food sales have leveled off in a range of A.E% to 7% in many large stores, by no means reaching the over-all goal of 10% set some years $——~ k») ago.E Frozen foods have continued to make progress. even though they have not fully lived up to some of the optimis- tic predictions. Table 2 illustrates the trend in recent years for supermarkets and food stores. The average per capita consumption of frozen foods is around twenty-eight gmunds per year or about five—tenths pounds per week for every man, woman, and child in the country today. Year supe Pa'uetba Food SLOPeo” 1960 5.? 4.04 1959 n.a. n.09 195d s.3 4.03 1957 n.a. 5.9fi 1956 A.O 3.93 1955 n.a. 3.71 1954 3.5 3.54 an source: HThe Super Market Industry Speaks--196l," Thirteenth Annual Fepo t by the Members of Super Market institute, lnc., 1(3. bSource: "What Customers Spent for All Products Sold in Food Stores," Food Topics (reprint), XVI, No. 9 (September, l9tl). *E. W. Williams, ”Immediate Trends in the Frozen Food Industry," Quick Frozen Foods, XXIII, No. 3 (October, 1960), 78. (W Lawrence Martin, HGrowth Factors for Frozen Foods in the 1960's," FrOsted Food Field, XXX, No. a (April, lggo), 12. . M is: In a discussion as to whether there is a limit to the con— sumption of frozen fruits and vegetables, one author ques- tions the relative security of the frozen food industry. This author expressed it as follows: ". . . if only six ounces more of frozen vegetables and fruits were eaten in this country, not only would the industry be more secure, but the public healthier.H7 There exists a paradoxical situation because the socio-economic factors which resulted in the early popu— larity of frozen foods still exist but the influence is not being felt. As mentioned before, an increased number of women are being employed outside the home and conse- quently they are seeking faster and easier ways to perfOrm their kitchen rituals. The built-in maid service of pre- pared frozen foods has helped many homemakers keep theiu new found freedom from the four walls. Another of the socio-economic factors prevalent in the past growth of frozen food is the natural growth of the population. "POpulatlon is likely to increase by 2.; to 5.0 million persons per year during the next lO years,”8 which means that even if the frozen food industry were to continue present promotion methods it would be selling more .7 T 7"" I r‘\ ‘- '"ls lhere a Limit to the ionsumption 01 F o:en Fruits and_Vegetables?,” Quick Frozen Foods, XXIII, No. 3 (March. lgel), 370. R . . , ‘Martin, loc. cit. 15 frozen food by 1970. But its percentage share of the total food sale will not necessarily increase. The young adult group should increase in the next ten years and, as a result, new households will be formed with a still larger potential for frozen foods. The density of population along the Eastern Seaboard and Pacific States awaits the rapid spread of new markets and marketing appeals. The education level is on the increase and with this comes an increase in frozen food purchases. A survey of frozen food consumers indicated their education level was much higher than non-users.9 The aforementioned are just a few of the factOrs that, in the past, have helped the growth of frozen foods. Some people express the Opinion that these factors and mOve will continue to influence frozen food purchases. But as of the last few years frozen food sales as a per cent of total food store sales has remained relatively stable. This is an apparent paradox for which there is no real answer. All this paper can do is to discuss various areas contributing to the stagnation of frozen food sales. Customer Acceptance In any discussion about the dearth of frozen food sales the one topic that comes to mind most often is cus- tomer acceptance or extent of over-all usage. Until yRalph Joseph Matysiak. "A Study of the Profitability of Frozen Food Departments" (unpublished Master's thesis School of Business and Public Service, Michigan State University, 1960), 13. l6 recently the manufacturers were fighting an uphill battle to win consumer confidence on the mere idea of using frozen foods. A recent Life magazine survey indicated that the acceptance of frozen merchandise has improved and has - lO . l -_ become generally favorable. The extent Oi over—all usage, as reported in the survey, is indicated in Table 3. TABLE 3 EXIEIT OF OVER-AIL USAGE* Per Cent Frozen Food 94 vegetables 93 juices 70 fruit 68 bakery products 63 meat pies 59 cinners 5' fish 41 seafood *Source: "Life Magazine Surveys Consumer Attitudes Towards Frozen Foods,” Quick Frozen Foods, XXIII, No. 3 (October, 19:0), 5/. In juices alone almost half (b8%) of the respondents indicated that they served it once a day or more. ”In con- trast, 1A% of the respondents never serve canned juice and . .1111 01" 27% never serve fresh juice course, the incidence of 10"Life Magazine Surveys Consumer Attitudes Towards Frozen Foods,ll Quick Frozen Foods, XXIII, No. 3 (October, 1950), 87. ll juice is predicated upon the quality of the product and the tremendously important aspect of ease of preparation. No longer does the American housewife have to squeeze juice from oranges when she can Just add water to an already prepared concentrate. The frequency of servings of canned vegetables is left behind in the intensive competition between fresh and frozen vegetables, which are comparably consumed. Table A demonstrates the competition of fresh, frozen, and canned vegetables. TABLE A FREQUENCY OF SEEVINGS* Times Per Month Frozen Fresh Canned Never --% 1% 3% 1—4 17 13 L9 5-9 19 13 17 10‘14 17 19 11 15-19 12 12 11 20-24 13 9 3 25-29 12 10 l 30 or more 10 13 5 Other -- *- '- *Source: "Life Magazine Surveys Consumer Attitudes Towards Frozen Foods," Quick Frozen Foods, XXIII, No. (October, 1960), 53. In the 1960 New York World-Telegram Grocery Inventory there was manifested a distinct pattern of seasonal variation I! in fkpzen food sales. There appears to be . . . a steady {zlimb in unit sales of frozen foocs as the weather grows (“LI 1 colder with the exception of frozen juice concentrates which display a steady decline."12 Frozen vegetables are rm exception to this, probably reflecting the incidence of availability of fresh vegetables. See Table E for quanti- tative data. TABLE 5 FROZEN VEGETABLE SALES FIVE NONTHS--19€O* Unprepared Prepared Months 13 Brands 2 Brands July 6M,O€7 2,6A5 August 58,930 2,696 September' €M,u02 2,5CA October 70,973 3,079 November 79,393 3,393 *Source: "Seasonal Fluctuation in Frozen Food Sales," Quick Frozen Foods, XXIII, No. 7 7 (February, 1951), 3k. "Most people liked frozen foods because of their freshness and the attribute of being faster and easier to prepare."13 A quality image has been built through the years and many people have been won over to the use of frozen foods. The gife survey indicated that in quality and health considerations, frozen foods ran close to the quality attributed to fresh foods. Table 6 details this more closely. i2"Seasonal Fluctuation in Frozen Food Sales," Quick Frozen Foods, XXIII, No. 7 (February, 1961), 36. 13” Life Magazine Surveys Consumer Attitudes Towards Frozen Foods,” loc. cit. l9 TMflEG QUALITY, HEALTH, AND COST COMPARISONS* Method of Better More Best Lowest Price Serving Quality ealthful Taste per Serving Frozen A6% 41% 40% 35% Canned 4 E 3 34 Fresh 51 98 55 2E Percentages may exceed 100% due to multiple responses. Only certain categories appropriate to all three types were compared. *Source: "Life Magazine Surveys Consumer Attitudes ". Towards Frozen Foods," Quick Frozen Foods, XXIII, No. 3 (October, 196 ), 91. Typical of the frozen food advertising and education approach in the last few years is one to the effect that the housewife must be made to understand that she is not serving her family enough luscious and nutritious vegetables for a healthy balanced diet. No mother likes to hear such an indictment brought against her methods of feeding her family. Whether or not the indictment is true is another matter and not at issue here. Any product preserved through the quick freezing system, in fact, does have sealed in the original vitamins, nutrients, and flavors. An appeal such as this has not failed to build an image in the mind of the housewife, and She now firmly be- lieves She gets better foods when She stops at the frozen food cabinet. Responses compiled in the Life survey indi- cated that the perceived quality of frozen foods has 20 increased, particularly with the juices, vegetables, and seafoods. Table 7 summarizes the responses. TABLE 7 PEPCEPTION or FROZEN FOOD QUALITY Now COMPARED T0 WHEN FIRST USED* Type of Product Higher Same Lower Don't Know Juices 60% 37% 1% 2% Vegetables 71 29 —— —- Meat Pies 57 29 A 10 Fish 42 55 3 —- Fruits 52 55 3 —- Seafoods 32 61 E 2 Dinners 46 AS A 5 Bakery 63 33 2 l *Source: "Life Magazine Surveys Consumer Attit .— .... _n— a 1 1—_, v1 -\ — \ ~ Towards rrozen hoods, QUlCK rrozen pooos, XXIlI, No. j (October, 19t0), 90. Life has shown that people do use frozen foods and that they believe in the quality of frozen foods But the fact remains that they are not buying the quantities needed by a store to qualify for a volume operation. even though quality is perceived as good. Substitutibility The extent of usage (as indicated in Table 3) is good, and rising continuously, but the volume of frozen food purchases has not kept pace. Perhaps the industry is faced with a problem of latent demand which must be uncovered in order to attain the goal of 10% of total food sales set 21 up a few years ago. Perhaps the goal itself was and is unrealistic. One angle of possible latent demand that no one has really explored is the degree to which consumers will sub— stitute frozen for canned or fresh items. It is only con- Jecture but it is felt that frozen foods of themselves do not have the drawing power that fresh or canned items have. n For example, suppose that a woman sees a can OI peas on the (D shelf on one side of the aisle, and on the other side sh sees a package of frozen peas at the same price. What is the probability that she will buy the frozen item? No one really knows. One woman in Miami, Florida, a Mrs. Johnson, seems to point up the fact that the yen to try more frozen fooc is latent in every woman. Mrs. Johnson had the chance, as a result of a contest, to keep all the groceries she could pile into one grocery cart in fifteen minutes time. Of the total bill of $129.97 almost 20% was frozen food. "This was all the more surprising since steaks, roasts, canned hams and Canadian bacon accounted for a large part of the total dollar volume."u+ In accumulating the large amount of frozen foods that Mrs. Johnson did, she completely forgot about the limited freezer capacity she had at home. As a result, she | luHIf I Had My Way," Quick Frozen Foods, XXII, No. 7 (February, 1960), 92. 22 had to enlist the aid of her helpful neighbors in storing the merchandise she won. This would seem to point up the fact that if home storage capacity was larger, then total frozen food volume would be greater. One incident does not make a fact but it is worth discussing later in the chapter. Another reason why the consumer is not buying an increased amount of frozen foods is in the price differen- tial. The Life survey sheds some light on this aspect of the problem. AlmOst two-thirds of the respondents per- ceived higher prices, compared to the first time used, but 50% would continue to use frozen food if they were econo- mizing on the food bill. So even though prices were per- ceived as risen, half the people would still use frozen products if budget pinching was a necessity. (See Tables 8 and 9 for detailed figures.) PERCEPTION O? FROZEN FWOD PETCES NOW COMPAEhD TO WHEN FIrST UbED* Type of Product Higher Same Lower Don't Know Juices MO% 27% 25% 3% Vegetables 28 31 29 12 Meat Pies 16 33 35 ll Fish 33 56 14 7 Fruits 31 A4 21 M Seafoods 30 A7 16 7 Dinners ll nu 3M ll Bakery 21 43 2M 12 *Source: ”Life Magazine Surveys Consumer Attitudes Towards Frozen Foods,ll Quick Frozen Foods, XXIII, No. 3 (October, 1960), 91. |\_) LA) TABLE 9 ATTITUDES TOWARD USING FROZEN FOOD WHEN ECONOMIZING ON FOOD BILL* Type of Product Not Continue Continue Juices 26% 7A% Vegetables A2 53 Meat Pies 3O 70 Fish 39 ml Fruits 73 27 Seafoods 7O 3O Dinners 63 37 Bakery 61 39 *Source: HLife Magazine Surveys Consumer Attitudes Towards Frozen Foods,” Quick Frozen Foods, XXIII, No. 3 (October, l9cO), 9i. Price then, does appear to be somewhat a deterrent to frozen food purchasing but even here the answer is not complete. Storage Capacity Another area contributing indirectly to the stag— nation of frozen foods is the extent to which the consumer has facilities for storing lane quantities of frozen food. In the past, the development of mechanical refrigeration for home use has helped the sale of frozen items. Most assuredly, limited freezer capacity would stifle volume pur— chases of frozen items. But up to a point, capacity does not seem to be limited. It is estimated that around 93% of all families in the United States possess some form of l? mechanical refrigeration equipment. At present, it is c: 1“U. S. Fepartment of Agriculture, "New Developments 24+ estimated that there are 7,700,000 home freezers in use, and one-half of the population now live in homes where freezers are in use.16 So to a certain degree, consumers do have the storage facilities necessary to allow them to make large purchases of frozen goods. A 1956 study indicated that families owning ref i- gerators with freezer compartments bought as much frozen 1 1 - n ‘ ' i ‘ ’7 :ruits and vegetables as families owning home ireezers.l' The excess capacity in home freezers was put to use in storing home processed fruits anc vegetables. One can only surmise as to the reason why the homemakers rid not pur;hase commercially processed frozen foods. Perhaps, and this is only conjecture, the housewife wno shOps regularly does not need a large home freezer to stOre frozen foods. Perhaps merchandising techniques provide no incentive for customers to purchase more than two packages at a time. The strategy proposed later in the paper should help to alleviate the situation and thus increase the total sale of frozen items. Display Equipment One last problem contributing to the stagnation of sales is the absence of a decent display case. Some of the in the Frozen Food Industry," Agricultural Merketing Service, Marketing Research Report No. 236, May, lQEd, 15. K lrMatysiak, op. cit., 12. 17Marketing Research Report No. 236, op. cit.. l cites: "Purchases of Frozen and Canned Foods by Urban Families as Related to Home Refrigeration Facilities,"U.“ A.; Agr. Mktg. Serv., Mtkg. Res. Rept. No. 60, February,19 ) \ 3'1 .\. TN LI 5‘ j. / r ‘V 0 25 newer stores have double-deck freezer cabinets that allow greater display area for frozen foods. The second decx is used especially for high impulse items such as baked goods and nationality speciality foods. Jewel Tea in Chicago has been testing a new air- curtain frozen food unit developed by Union Stockyards and Transit Company. Now in limited production, the three~tiered vertical unit is claimed to be the first air-curtain cabinet designed to maintain below—zero temperature and will be offered to food retailers in limited quantities early next year [1962].15 As with the double-decked cabinets, high markup items move faster off eye-level shelves and shoppers like the ease of selecting foods at arm level. H'A five-week merchandising test by a large chain, accounted for doubled turnover of items displayed, compared with low—level chest type cabinets at the same location,' it was said."19 Hussman Fefrigeration and Tyler Refrigeration are known to have limited production models of a three-tiered display case but no reports of actual testing have been made up to this time. It is not expected that operators of supermarkets will rush to buy the new display case but this type will be put into new stores. It is not realistic to hope the 18"Chicago Firm Unveils 3-Tier Jet Freeze Unit," éfixpermarket News, December 4, 1961. 19Ibid. c L; present equipment will be Junked in orcer to tame advantage of the display characteristics offerec by the new unit. In the future, however, the triple-tiered air-curtain unit will be used extensively. Once it is put into the larger stores there will become available a vast number of older model chest type display cases which can easily be used by smaller stores. For the most part even the present, wide chest type is an improvement over the Older coffin types used by some smaller retailers. In any event, this new unit will revolu— tionize display techniques in the frozen food industry. In this Chapter the discussion was concerned with the history and development of frozen food--its problems and its relative position in the food industry. Many problem areas were discussed and many questions asked but left unanswered because. for the most part, there are no pat answers. This report only raises questions, it does not attempt to supply all the answers. it is hypothesized that the dearth of frozen food sales lies in the interaction of all the problem areas and cannot be attributed to one specific area. What is evident is "a people problem”--both consumers and retailers are at fault. As was seen earlier, the quality of frozen foods is excellent, price is comparable to fresh and canned, storage capacity is good but could be better and display cases will presently be on the market which will allow more effective merchandising. It is believed that there exists a latent demand which must be uncovered if the industry is ever to parallel l .IIIIIII ll ill." III 1“ l F ,' 1“ y C .’ its past grOWth rate. Latent demand can be inéreaaed only by constant ano imaginative promotions. eflucating the people to the advantages. quality, and costs of frozen fooos. To outline a strategy for effectively promoting and merchan- rozen foods remains the problem of this paper. ”*3 dieing CHAPTER III NET PROFIT DETEFMINATION The present chapter is concerned with net profit determination of individual-frozen food items. A conven- tional approach to cost allocation and net profit determin- ation will first be described, and then a case will be made for a new method of determining operating costs when com- Puting net profit. The significance of determining net Profit on individual items will also be explored. The conventional approach to the net profit deter- minaticnd problem has been on a departmental basis only and rarely, if ever, on an individual product basis. Such an approacrd entailed using supposedly precise allocations of Operatiidg expenses to the department, which costs are at test a :statistical guesstimate of actual costs. In a recent-study, Progressive Grocer "proved” the pr“critiift-‘Qility of frozen foods, as frozen foods, on a depart- mental loaisis.1 Data were amassed over an eight—week period not‘”fiLb’ on frozen food sales and margins but also on depart- me I "I _ w ntal <3FN3rating expenses and every efiort was made to be \\ 93 l ’ ' 1 o . _. n .fi HS les and Expense Analysis Proves Proiitability Ol t«cx3d ' Progressive Grocer, XL, No. 1 (January, 1961), I b: 29 both fair and statistically accurate in making the analysis of departmental expenses. Expenses were allocated either directly or pro-rated on the basis of commonly accepted methods such as selling space occupied or units handled. Gross margin on sales amounted to 25.8% while total overhead came to 20.4% of sales--a nifty E.*0 net profit on frozen ,1 :77 - (/, fbod sales. For detailed figu es see Table l0. TABLE 10 FROZEN FOOD EXPENSES ANALYSIS--WEEKIY BASIS* ‘ SALES $1419.82 100.0% DOLLAR MARGIN (51—1 95 25 . 8% % MARGIN 25.5% EXPENSES; M (at 38% per lin.ft. for display $ 25.05 1.3% equip.,723¢’& béfi/per lhrft, .foristorage eq.) _Q§%E§ciation (All equip. display at 2H.9l 1.7% 1&5 per lin.ft. installed,storage 81: $1172 & $785 inst. Checkout efluip. pro-rated on units handled basis at 10%) Salasries (Direct~—incl. mgr., ass't., £9,0M 3-“% superv. commissions) §é§§g1igs (Indirect--checkouts pro— 49.C5 3.5% r“ated at 38% of g oc. sal. exp. & (Drl units handled 10%) §§L§£Z¥ Maintenance (Direc ) 6.03 .M% EiEEfiige Maintenance (at 25% of total 13.b3 1.0% fTthure maintenance) Mtilities (Pro-rated on basis 10.33 .7% Of‘ selling space occ. 7%) 92E§IL_EXpenses (Pro-rated on basis of 86.%0 C.l% a Se]sling space occ. 7%) «Qflfllilggs (On selling space occ. 7%) 2.32 .2% Ser’Vice Departments--Admin. Exp. 20.00 1.14% TO'T‘AL l. '% of sales) * ' 23<.#? 20.u QPERATING PROFIT i 75.53 % “El PROEffjw 5,M% *SOUI‘Ce : Frozen FOO 0 "Sales and Expense Analysis Proves Profitabilit: Oi Cis,” Progressive Grocer, XL, No.1(January, 19bl .73. The final figure certainly points more than favorably to the profit angle of this much maligned g:ggp_ of products. Note the key word, group. Progressive Grocer has attempted to show that beneath the su face of all the talk of unprofitability of frozen food‘ as a group, there actually does exist a substantial profit margin. Assuming for the moment the guesstimates used in allocating expenses are close to reality, Progressive Grocer has verified its contentions. Such figures should certainly help one to adjust his evaluation of this steadily growing line. But where does this leave the manager in the analysis of his frozen food department? He does not have the time. facilities, or wherewithal to make a statistically accurate study that will supply the answers to his many questions. HElWNltS to know which products he is making money on, how mwfliéuoace should be given to Brand X, and how much it costs rim to stock certain items. A departmental profitability analysj_5 along conventional lines will not supply the answers U>the above questions without lengthy and unnecessary com— putatiCJns of questionable accuracy. This study proposes to answer questions about in- <fiyiduagl products. The method provides a framework in which ‘Hm manquer can determine net profit on individual items in ins froznen food department. It is hoped the procedure will WH3t001;3 in the hands of the store manager to enable him tonmke Incie intelligent decisions about the kind and amount of ‘ . .. dibplfty space for each item carried. Inlormation ,5 jl procurred will prove beneficial not only to the sto e pec— sonnel but also to the buying peOple of the chain. Armed with information on net profit of individual frozen food items, buyers can make more intelligent choices between brands and items in a commodity line. It may happen in particular instances that, regard- less of the merchandising strategy followed, certain frozen food items will not have a net profit, but. in fact, a net loss. The procedure delineated here will help reduce the osses. The discretion allowed the stOre manager, as to H1 whatrnerchandiSe he can carry, will limit the amount of re- duction of losses. Physical facilities or company policy on Private label can also limit potential reductions. Distinctions between the proposed method of profit determquation and the conventional method focus on the level Cfi‘reféxrence and potential usefulness of gathered information. The leveel of reference in the conventional method is at the departnuental level while in the new approach the level of {Pfeferlcre pertains to individual items. in the p Oposed methOd tLhe manager is able to use the information quite readillf in designing a program for maximum operational effhfllericy, while the conventional approach only prompts ‘Hm marlaéger to say, HThat's nice," and to drOp the whole matter . :[t must be stressed that the store manager can do themmpmltations for his particular store provided the chain iSW' ‘ . . .v . 11131ng to help ascertain certain initial inlormation. "2 k) The information referred to here will be explained during )1 the course of the chapter and includes index numbers f0“ direct and indirect operating costs. and certain percentage figures for a particular store. Close cooperation between the chain and its store managers is assumed because, with- OUt such cooperation, the accuracy of the approach will be grossly impaired. Net profit computation is done in the traditional way. Gross Profit-—weekly (dollars) $XXX Direct Cost $Xxx Indirect Cost xxx Total Cost xxx Net Profit--weekly (dollars) $xxx Departmire from conventional methods appears when calculating direct eand indirect costs. An understanding of the problem Of DPOpesP allocation of operating costs is incomplete with- out reccbgnizing that every item in the frozen food department should riot bear the same amount of overhead or labor costs cm the Ciepactment. A most readily admitted fact is that diflfifiwerit cases of goods have a different cost for labor and fox“ the space occupied in a supermarket. Frozen juices in 8(ihunp display, for example, require less labor than carefill_13; stacked vegetables. 'The cost of bringing the merchandise into the back- 100m.f113632er, price-marking it, placing it in the display Case . . . . . . ar“j then checKing it out is herein designated as the din 33 The expense incurred as a pOrtion of the store's rental cost, its promotion and advertising, supplies, depreciation and insurance charges is designated as indirect costs. For the sake of simplicity the procedure in this paper is to talk in terms of stocking one-case lots in dis- play cases. In practice one must be careful to adjust for actual Operating conditions. Included in the direct costs involved in handling a case of merchandise are additional labor costs for non- production time, fringe benefits, and taxes on wages. "There is probably no exact method of allocating non- m C production labor to each case . . . ." In order to minimize this problem, it is suggested total labor costs incurred by the frozen food department be allocated among the different products in proportion to the production time determined by time and motion studies. To determine. by time studies, the relative direct cost for different types of frozen products it is mandatOry that chainwide cOOperation be established from store to head office and back again. (Step-by—step instructions on how a retailer can compute the direct labor COSt can be found in Appendix A.) Indirect costs may be allOcateo to an item on the basis Of the number of cases carried in inventory or the J 1inear feet of display +pace the item occupies, each with \ 2"The Dry Groceries Department," Food Topics, XVI, NO' 5 (May, 1961), 3. (Reprint.) I‘ . .4, kAJ corresponding advantages and disadvantages. Overhead charged on an inventory basis tends to emphasize the cost of carrying quantities of an item, while linear feet of display space tends to emphasize the importance of facings. There is usually a close correlation between the number of cases carrieCi in inventory and the linear feet devoted to the item. Thus, there is likely to be little difference in the overheaid charged against an item whether based on cases in inventcyry or feet of display. The procedure followed in this report allocates overheard on the amount of inventory carried for an item, adjustexfl by the cubic space that inventory occupies in the carried in inventory was used because of ease \A ’2 store,~J C U; se m of undeiistanding by supermarket managers and ease of appli- C.--t1 ‘_ , 1 ~ 7_ c ".0 o A ’b _,. a On 13y buy rs and other chain ofiiCials. Lest one 10r- get, thee key role of the manager cannot be understated. A thorougk} understanding of costs per item will allow said manager ‘to be fully aware of profitable opportunities arising uch m Over tigfliter supervision of display Space and facings. 8. ~ «-, ‘ ‘v ‘ ' a , ,A o . . . ' I rlunde1:standing tends to assure maximum operational effi— Ciency_ 'The Profit and Loss statement of the store provides a r .. . . eady abource for operating cost iniormation and also #- In.certain cases some adjustments must be made on the O Addengephead figure, For circumstances and methods see a tC) Appendix B. 35 recent inventory figures. Since an accurate net profit figure cannot be computed without relatively current inven- tory figures, the Profit and LO‘S “t“tement is an excellent soumse for such information. On the othe other hand, information on linear footage is often available only at headquarters from a store's blue- prints which may not reflect current arrangements. However, thetstore manager could measure the linear footage under currerit operations and thus make the basis more valid. The primary reason for not using lineafi footage for efllocaiting overhead charges is that space occupied by a case Cfi‘mez°chandise has height and depth as well as width, and thecnqe—dimension character of linear footage may be mis- leadirug. For example, one brand of frozen peas may take five irlches of linear :ase space but be stacked eight pack— EigeS desep and six packages back. A second brand may taxe iive irlches of linear case space, be stacked eight packages deep bth only three back. A reasonable allocation of overhead Wouhi c3ha3ge more to the first brand than to the second; even though txoth occupy the same linear footage of display space, but the} first brand occupies twice the cubic display space. The value of the case of merchandise has not been 0 j. -. -' o Onsuhai‘ed in allocating overhead. except as interest charges a ‘f' 1.. . . g . e par»: (of the store's expenses, lor the reason that the COSt of‘ nuerchandise is incurred only when the item is first s - . tOCked«- As the item sells down it is paying for the items used _ . g . n o 1 ir1 f13stocxing. Hence, an investment in an item is made 35 mfly once and only the interest charge on that investment is acontinuing expense.5 The carrying charge for the initial Hwestment is not a significant factor in over—all charges against the item. (Step-by-step instructions on how a xetailer can compute indirect costs can be found in Appendix B.) In computing direct charges one must be careful in pmrticular instances to adjust for sales above or below the one case figure. Similarily, if the average inventOvy carried for an item were more than one case, the weekly indirect charges would be proportionately more. Using substantially the same techniques developed in this paper,the United States Department of Agriculture (USDA) conducted a study in the dry groceries department of three chains. The results of that study are summarized in the following paragraphs. "Unit direct and indirect costs vary between com- panies studied and between stores of the same chain. Higher unit labor costs in a store are usually a reflection of Operating inefficiency. . . ."6 indirect costs tend to be 10WeP in older stores because of reduced depreciation, lower 1”'ental and smaller backroom space. Stores with frequent deliveries also tend to have lower indirect costs. "Higher 3' ~ ' ' ales VOlume seems to be associated with higher unit overhead .“‘___‘__ I: J" rT'V , o 'lhe Dry Groceries Department,H loc. cit. 6 Ibid. costs . . . ,"7 because fixtures are geared to high sales potential. The USDA study also indicates an item moving less than one case per week makes no contribution to net profit unless margins are adequate and inventories kept low. The traditional approach to research on margins and profit con- ‘ \ \ "ross profits rather than tribution of grocery items is with get. Although there is a relationship between the two, some items can have a satisfactory weekly gross profit and still return little or no net profit. Some comparisons have been made in Table ll between gross and net profit for selected items carried by an eastern supermarket. Higher volume sales of canned peas did not mean a higher net than moderately selling Devil's food cake mix. It is an opinion that similar results would occur in the frozen food department if an actual study were to be undertaken. Since the methods develOped here were not tested (for reasons iterated previously), the results of the USDA study of dry groceries were cited. In the approach to the problem of profitability an attempt was made to dwell on operating costs of the depart- ment. Since the individual retailer has little or no control over Capital expenditures for his store, the cost of display Cabinets and walk—in freezers was considered as sunk. AdmittEGly this type of equipment costs more than grocery \\ A.chLQmmV .u ”flawofl “hazy m .02 mH>x “mgflQOH axon :mpcmEppmme mmflgmoogo mLQ mcb: “mngom* mw xwm mam mN Anpflcrvm;opcm>cH zaxmmz mwmgm>< m: mam rpm ow Awpficrv nmamn mmxmmz mmwgm>< moo. nmo. sqo. wuo. ”w, pficz Lma nwOLo nm.m mo.a LO.m Fw. Aww mmwg Lma nmogc oq.m oo.w mg.mfi wo.m A%V ammo gma Hampmg mm. mm \m mm. mm. Anpfics Lo pficsv fiampmm wa.w m®.: Km.Ma mm.m va mnwo 9mm pnoo memoo Qz< mqum mo qH>.: w mm.m Aavhflxmmz--ewmomm mmogo mfl\:m .No m\m: m\fl‘\$§ .mOwa\ma tz meu nmmm mpfiz3 cfifiom moflsn zoom m.flfi>mc cmmgo znflm aCSB maamwmcfim *mZMBH wmmoomc QMHcmqmw mom mZOmHL tend to use more frozen food than middle or low J) v inco , ”“3 <3ategories," says a survey by the Chicago Tribune. \ Ibid. u——————— n H a 3"Across the Buyer's Desk,” Quick irozen Foods, XXI Ill, Iqo. 3 (October, 1960), 215- 3h An economic valuation tells one the incidence of television ownership, dishwashers, freezers, and lawn mowers, and helps set the status of the neighborhood. The store manager has available to him a great deal of published material on the above vital statistics. Published materials start with the publications of the United States Bureau of the Census. A book compiled by J. ,- . A Walter Thompson Company, Population and Its Distribution, rearranges the census data to cover specific markets. It arranges the census data by l€2 metrOpolitan markets and A36 smaller urban markets and provides basic material on every town in tneCUnited States with a population of 2,500 or more.r A number of other departments of the Federal Govern— ment can also supply valuable information. Among these are the Department of Commerce, Agriculture, and Labor, speci— fically the Bureau of Labor Statistics. From the latter dePartment comes the figures on employment, and income and Price indices for various markets. Also, state governments and Chambers of Commerce publish reports on conditions Within their areas. After assimilating and understanding the economic batteians in a market, be it heigthrhood or city, one needs t0 know where peOple are accustomed to finding different x “John w. Crawford, Advertising: Communications for Miflaagmgnt (Boston: Allyn and acon, Inc., 1960), 133, Citing;J} Walter.Thompson Company, Population and Its Dis- liflaggggg (7th ed., 1951; New York: McGraw-Hill Book Co., Inc , 1952). [.5 ’Ibid. \fl kinds of goods. It must be decided how much of one kind of product people buy, in other words, brand share. relevant to the report here, the manager should know what portion of total food sales is in the frozen line in his market, and how does this compare to the national, or state breakdown. Then he can compute the same proportion for his own store and compare it with his market, the state or national figure. Newspapers and magazines, and radio and television stations, provide much specific market data. The Consoli- dated Consumer Analysis brings you a nation-wide picture of shopping habits with 22- market comparisons in 125 different product classifications and thousands of brands, a three year trend in product use and median product use.“ In newspapers participating in the Consumer Analysis each provide data in greater depth fOr its own market area. The Minneapolis Star and Tribune conducts an annual home-interview survey of Minnesota and Hennepin County (metropolitan Minneapolis) homemakers on what products they have on hand and in use in their homes. This is not a brand "preference" sur ey. It is an INVENTORY of what's on hand and in use (or what was last purchased), not what's ”generally" purchased or what is ”preferred" by the homemaker.’ An additional selling point of the survey is it defines the Elbid. [-7 q ’Minneapolis Star and Tribune, Ninnesota Homemaker \. -. - — p '—"—"" :Bivey No. 1A., 1961. “_ J O“ \ market in terms of the medium, a newspaper, which is used extensively for retail grocery advertising. The major obstacle in relying upon published sources is the tendency of market facts and figures to go out—of- date rapidly. More and more companies are relving upon commercial research organizations. Individual store managers can get information from these sources only through headquarters, if the chain subscribes to the service. ’\ The Food-Drug index of A. t. Nielsen Company reports to its subscribers every two months the findings of actual store audits. Market Research Corporation of America measures actual purchases by families across the country. J. Walter Thompson has for years maintained a Consumer Purchase Panel which reports purchases to the company each month. The store manager should know why peOple buy what they buy. Often their buying reasons are not individualis- tic at all but deeply rooted in the culture patterns of the country. He should be attuned to the changing patterns of mOPes and folkways of his neighborhood. For example, the inCidence of working women in his area might be quite high, indicating to him an excellent opportunity to promote pre- pared fdozen foods. Customs of a people change with great rapidity, but the fastest changing kind of human behavior is in the area or faShions or fads. An observant manager will note or be a» r “ y '1 - , o -. w ...-a 1 wdfe Of a iad for particular focus. rrozen and boxed pizza P-V 4/ is an excellent example of a food fad. It is impossible to hope the store manager will be skilled in motivational psychology, let alone have the time or facilities to practice it. The chain usually does not maintain bureaus that go into research of this sort. Trade publications, journals, newspapers, and weekly magazines give insights into the lives of Americans and a store mana— ger would do well to cultivate an interest in such publi- cations. Sgpermarket News, Chain Store Age, Printer's ink, . publications of Super Market institute, Time, and_£i:§ are examples of authoritative sources of this sort. Libraries are excellent storehouses of applicable information and less expensive than subscribing to magazines or research services. A store manager does not have the time, money, or facilities to do the detailed market research required to gathei'all the information. Some chains do engage in market research of their own by use of test stores. The stOre manager might well be asked to participate in a study of customer buying habits in his store. Such studies seek to determine the origin of customers, frequency of store visits, mode of travel to the store, size of purchase, items pur- chased, and departments patronized. The chain itself can play a very important part in the whole area of market research by acting as a pipeline or funnel of information to all its store managers. With- out the benefits of chain sponsored market research the store manager will be stifled in his attempts to gain A5 accurate data. He will then be obliged to seek adequate information from public sources obtainable through libraries. In either case, whether chain sponsored or under— taken on individual initiative, some type of market research is imperative. As stated earlier in the chapter, knowledge of the market is one of the essential criterion upon which good space allocation must be based. CHAPTER V SPACE ALLOCATION In the two preceding chapters, two essential cri- teria, upon which good space allocation should be based, were developed. It is the intent in this chapter to inte- gratme the criteria into a workable formula to be used by tfluaxnanager in allocating space to categories of items and to items within the categories. "Many frozen foods men have fallen down on the job. Frozen food--space the most expensive merchandising space ml in true store—-is not being fully utilizied. The high cost c3f refrigeration equipment is only one element in keepiung frozen food space the most expensive space in the StOPe.. Because, until recently. the industry has lacked a Cabirugt to display merchandise at eye-level, the space above the Céabinet was wasted as far as selling space is concerned. This ,situation should be remedied shortly. A survey conducted by New York University on frozen {bod cjpearments revealed that in half the stores surveyed, betwreen one-fifth and two-fifths of the available space \ 1”Available Space Not Fully Used,” Chain StOre Age, G!" r: r“!1 - — . O~ - Exec. ad. xxxv, No. 8 (August, lj,j), lit. 5 M9 50 Was wasted.2 Lack of efficient housekeeping and merchan— diSing by store frozen food men generally contributed to the gross waste of available space. The study further con- cluded there is not enough frozen food space in many stores. Since, for the most part, the store manager can do little about increasing his space for frozen foods he must Inake every effort to use what he has efficiently. "Top- fligfiit management is the catalyst that can turn frozen foods ffimxn a low return, also-ran department into the dynamic DPOffi_t producing section it has become for a growing nwnber Of tfiie independent food store operators."’ Under the cir~ the customer. Complete customer understanding of how tx) cook the product is necessary if repeat sales are to be exqoected. If the customer knows what she is to do with the u"Ten Ways to Merchandise Frozen Foods," Chain Store age, Groc. Exec. Ed., XXXVI, No. a (April, 1960), 162. 60 product, her family will be satisfied with it and she will buy it again. The personal touch of a hostess might well be the key to repeat sales. Advertising can exist on either a large or small scale. A manager must make use of the facilities at his disposal by calling attention to not only private label but also nationally branded merchandise. Display Display meshes well with advertising by calling final attention to a product for which advertising has built a desire. The chief purpose of both display and advertising is to sell more goods and, thereby, create greater profits. There are two categories of display, namely, (1) the regular display, that is, merchandise in a regular dis- play space, and (2) special displays, consisting of merchan- dise in cases other than the customary ones. The presenta- tion will not make any differentiation in the techniques to 'be applied to each category. What will be discussed is equally applicable to both categories. To discuss the tech- Iniques of display does not preclude talking about a specific category. It is not possible to set up a standard procedure IRDr the display of frozen foods because each individual cnoeration must be tailored to fit the needs of its environ- Inenih No hard and fast rules exist for determining where to ' 61 display frozen foods. Some stores have noted much success by placing the freezer cases next to related items; for example, one group of stores placed the vegetable section across from the produce department. In some markets, ice cream cases are located as near as possible to checkout counters to take advantage of the excellent impulse propen— sities of ice cream. Case placement raises a controversy because some frozen food merchandising men recommend placing all freezing cabinets near checkout counters. Such placement, they say, will help the customer keep her products frozen, and hence, maintain the quality inherent in frozen foods. Another reason for near checkout placement is to take advantage of the heavy traffic pattern of the aisle leading to the counters. One chain in California has solved the problem of thawing by supplying large size insulated bags at the cabinet.5 The bags not only keep the products frozen but also spread the name of the chain through effective adver- tising on the outside of the bag. If all stores were to supply means of keeping products frozen, cases could be placed wherever shopping patterns would dictate. Impulse items could be displayed near checkstands or other peak traffic locations, or items could be put near related de- gxartments. Any number of good display techniques would be Ikallowed if the Operator did not have to worry about thawing. R ’"500% Increase in Frozen Food Sales in Three Years a1: Quality Foods, Inc.," loc. cit. 62 Once case location has been determined,suitable case layout should be planned. There are many ways to lay out a frozen food cabinet but one maxim should be kept in mind, namely, item position should be based on its drawing proper— ties relative to the traffic patterns of the store. Fast selling, basic items such as Juices, vegetables, and meat pies should be placed as far apart as possible to encourage shopping of the entire cabinet. Layout must be designed to pull shoppers through the entire department. Items of similar shape should be separated by packages of a contrasting color so as to distinguish one item from another. Quality Foods, Inc., has used colored fluorescent lighting above one section of the case to obtain contrast. Some stores have tested angled product stocking to break up the monotony of the frozen food case. Packages are placed on an angle so the customer can see the product more readily and can pick it up more easily.6 Frozen food men say customer convenience is the biggest plus to using the method. On the other hand, besides being exceptionally messy in appearance, angling is found to be workable on only forty per cent of the items which return only twenty per 7 cent of the sales in frozen foods. Therefore, use of 6"Chains Test Angled Selling," Chain Store Age, Groc. Exec. Ed., XXXVII, No. 10 (October, 1961), 170, 172. 7Ibid. 63 angling; might best be restricted to contrast for a few rows only, nnxch the same as the color contrast idea. Another effective method of display is to bring togethm31= related items in either the regular cabinet or spot czaIDinet somewhere in the store. Quality Foods reports that "Ipilacing frozen waffles and frozen fruits in the ice as cream :section increased sales of those items as much u" , . 15%. Some Operators have mixed frozen cranberry relish With iskue ffpzen poultry and obtained not only cross-merchan- dising; tuit color contrast as well. The old faithful for frozen food display is the dump displéazl usually reserved for "special," fast moving items. In thee ;long cases of the modern supermarket, dumps are ef— fectihvra only in prOportion to the neatness of the rest of the C‘ abinet. Spot cases, dump or non-dump, should be moved every week 'tc> “take advantage of impulse creations. If one of the new irnnnaxrable dual-temperature cases is used it is necessary to Chairugea the merchandise weekly, otherwise the customer will 13hink that unwanted merchandise is being pushed Off on her. Fqéiriy operators are using masking tape to make special price FDEicrks to promote in spot cases, where they are partic- Ularl 57 effective. Ifrom the retailer's point of view, there are ten ODViOu $51-37 good reasons for using special displays: ”500% Increase in Frozen Food Sales in Three Years :L11~1:y Foods, Inc.," loc. cit., 250. 64 they sell more merchandise they create a low price impression they help to balance inventories they help to strengthen advertising they add excitement to a store they break shopping monotony they create impulse sales they highlight new products they help reduce stockouts on weekly ad features they offer shoppers suggestions on what to serve OKOCDNChUl-I—‘LMMU— H The previous discussion has revolved around ways of gettirug the customer to the cabinet but not too much has been :saiid_about keeping here there. One of the surest methociss of irritating customers is to have sloppy pricing. GOOG, Qleaglble face pricing allows the customer to make Pead&’ {Dicice comparisons with similar items. Some Operators adVOC‘Ethe side pricing because of the ease with which it can be dc>riea, but face pricing remains more popular with the Custome 1-5. In this section many ways of displaying frozen foods have -bW3€H1 discussed-~some obvious and some not so obvious. The EstCDrwa manager would do well to be more imaginative in using; Cij_sp1ay space. The preceding illustrations served only ‘tCD suggest what can be done to further better space ma Haguernéfirit and to help increase sales and profits with a mininndfn <>f costs. Elim' 1nation of Out-of-St0cks Trhe out-of-stock situation is probably the biggest area 1_r1 Vvhich store managers have been guilty of neglect. kmrv C3 9George E. Kline, "How to Build More Profits into k“ Progressive Grocer, XXXIX. NO. 1~ I3’G3c7ial Display Program," ( January, 1960), 249. 65 Some more aggressive managers, such as Mr. MacFarland, owner of an I .G.A. store, feel that: . if a housewife sees a frozen food case half- empty she will think everything has been picked over, and she does not get a good choice If the cabinet is full she has first choice and will be more likely to buy . 10 If what MrflvlacFarland says is true then the manager had better make a critical appraisal of his case stocking methods . In the past ten years two studies have been done on the problem of out—of-stocks and both show that out-of stocks seriously affect frozen food sales and, hence, profitability In the fi rst study done by Progressive Grocer in 1953, Spectacular sales increases occurred when the cabinets were kept fally stocked.ll Frozen food sales of a group of stores were studied for a normal two—week period when no SpeCial emphasis was given to frozen foods, and during this period 1, 336 units were sold. In the following two-week cases were restocked daily, resulting interval , frozen food in unit Sales of 2,021, a healthy 51.2% increase. Even if t he per‘Centage increase is reduced by one—half, the results ind' ~ icated greater“ profit potentialities than most stores are now r‘ealizing. \\ i O , nAverage $U5 per Linear Foot Weekly Sales: Secret Stocks, loc. cit., is to . 105, KeeIJ Cabinets Full, Minimize Out of Trout, " "Knobert W. Mueller, George E. Kline, and Joseph J. alqwomers Buy 22% More When Shelves are Well Stocked, Pro res ~J 31er CIOCGI, XXXII, No. 6 (June 1953): “0 H 66 Frozen foods, with certain exceptions such as peas, beans and frozen juices, are bought largely on im— pulse and no merchandising technique can begin to compafg with a continuously stocked well—arranged case. The second study, done by Quick Frozen Foods, proved substantially the same thing as the first study done by Progressive Grocer. The approach was slightly different in that the Quick Frozen Foods study was concerned with keeping 13 a record of stocking procedures for a group of stores. "Store D . . . having the best record in out-of—stock does $40,000 a week and enjoys 6.52% of its volume or $53.58 per linear foot out of its 36 feet of cabinets."M Store D, though it had the best out—of-stock record, had a poor apportionment of frozen foods but did better than stores With pI‘Oper space allocation and a bad out-of—stock record. This Just seems to point up the fact a strategy for merchan— dising must include a number of aspects rather than emphasize only one. Integration of advertising, display and good stocking procedures into a well-defined merchan— dising strategy will benefit any store manager. In any case, the studies done by Progressive Grocer and Quick frozen Foods indicate a need for a closer look at \ the out‘Ofmstock situation of frozen foods. A customer \ __ 1 21mm, us. 1 tific Ca 3"Reducing Out-of-Stocks Takes Priority Over Scien- fih>fi.net Layout," Quick Frozen Foods, XXIII, No. 9 ’ :1—39631), 91. 14; lbid. cannot buy what the store does not have. Prcmer Handling The importance of prOper handling and its effect on profits and sales can readily be seen. Improper handling of frozen foods results in lowered sales and profits induced by defrosted and torn packages, and poorly marked packages. Inefficient use of labor causes increased costs which eat up any profits generated by the strategy for merchandising of frozen foods. Costs are increased by excessive opera- tion of‘ refrigeration machines resulting from imprOper stocking of frozen food cabinets. The store manager can do three things to help assure correct handling of frozen foods, namely, assign responsibility, instruct carefully, and check work regularly . Just as in the other departments of a supermarket, the first requirement of a good frozen food department is to make one person responsible for it. In many stOI‘GS, the frozen food department does not require 'a man‘s full time; n - evertheless, one person must be assigned the responsibility of ordering, Stocking, and rotating and the care of the freezer: equipment. The individual must also have the auth- Ority to direct those who may be assigned to help him. The store manager should take the time to be sure the Debsoh assigned the responsibility of the frozen food dePaPtmel’lt knows his job thoroughly. Clear, concise instruc- tions ab e a necessity if the man is to do a good Job. Many 65 problems; can be alleviated if a manager checks periodically to see tfloat the job is being done properly and effectively. 'fhe manager can facilitate the handling of frozen foods try instructing his employees according to the following checkli:st;: WHEHfl RECEIVING IBe ready for the load ESegregate items that can go directly into display cabinet EStack cases closely together [Inload the order quickly and get it ba<3k under refrigeration IN ’ITiE STORAGE FREEZER ESegregate merchandise as it is put away lieep labels visible or mark visible ends of cases EDush carts into walk—in type freezer to load or unload Iload the cart so merchandise put on last will be taken off first Idisplays of at least half a row 69 Don't stock merchandise too tightly in cabinets Don't backtrack . . . service as you go Don't block the cabinet with carts or empty cases Combine rotation with stocking Get the case up to the display when stOcking [Ise both hands when stocking Keep the displays below the fill line of the cabinet Use dividers when feasible15 Summary TFhe above checklist is only a summary of the essen- tial elmsrnents included in any handling procedure. Lest one forget, {Droper handling must be integrated with proper dis- play eunci jpromotion techniques to help round out an effective strateg;;z for merchandising frozen foods. The objective of the ch21p>tuer was to suggest techniques for proper merchan- d131ng ishuat would assure efficient use of available space. The il lilsstrations mentioned should not be taken as the be-all and enci—ealld A.store manager should take a long hard look at his Ffrfssent tactics to see where he can improve the most, and thcerl izake steps to build up the whole program. \\ l 511 H ‘. . vii Frozen Food, Extension SerVIce of UniveIsity of Massacrku HAL, ;le§;53€3tms and United States Department of Agriculture, \ll-i. CHAPTER VII SUMMARY AND CONCLUSIONS The purpose of this paper was to formulate a better merchandising strategy for frozen foods, by developing in the manager a consciousness of operating costs and market characteristics. The problem was occasioned by personal observations and comments made by certain managers of a large grocery chain. It is believed that many managers lack sufficient insight into what the frozen food department could do for them by way of contributing to gross profit occasioned by sales of frozen foods and the relative drawing power of the department itself. This lack of knowledge caused a situation of neglect believed to be unhealthy. In order to remedy the situation, a strategy was prOposed that would overcome the manager's lack of insight into the potentialities of frozen foods. Past and present problems of the frozen food industry, leading to the situ- ation of relative neglect, were clarified. Formulation of a method whereby the manager could easily compute operating costs and hence, net profit, was placed first on a list of importance to the strategy. In addition to net profit Tl considerations (though important, but not all-important) a description of market characteristics and situations was made available as part of the strategy. Profit contribu— tion plus demand of a market for a product were combined into a formula for space allocation that gave weight to over-all product performance. Space was concluded to be wasted by a number of store managers and this was consid— ered to be definitely an unhealthy aspect in the department's competitive struggle for profits. Efficient use of available space, through use of display and promotion techniques, was touched upon as a necessary element in an over-all attack upon the problem of strategy. It was hypothesized at the beginning of the paper that knowledge of the effect of Operating costs on net profit ans an unawareness of market characteristics will benefit the store manager in formulating a strategy for merchandising frozen foods, All the evidence presented indicates that knowledge of the effect does benefit a store manager'and is, in fact, an integral part or component of any merchandising strategy. Without a thorough-going knowl— edge of‘the direct and indirect costs allocated to an item, the manager will never know what he can afford to spend on promotirg that item. Without an awareness of the tastes of the nuirket, the store manager will never be able to draw ifluit extra little bit of business that means the difference betweerlauladeQuate manager and a good manager. 72 For a number of reasons the method of allocating costs is not as accurate as it might be under non-existent ideal circumstances. The method was not tested because of a scarcity of time, money, and lack of an adequate test sub- Ject. The method of allocating costs is a departure from the trial and error approach used by many managers, but it is not as accurate as a s0phisticated statistical procedure computed by a machine. The proposed strategy itself is not the be-all and end-all of the merchandising world, and is not guaranteed to cure all the ills associated with frozen food merchan— dising. It is one man's approach to the problem and, it is believed, a little more workable and accurate than that presently used by store managers. APPENDIX A HOW TO COMPUTE DIRECT OPERATING COSTS ON A CASE OF FROZEN FOOD The appendix will present, in detail, the procedure by which a retailer can compute direct operating costs on a case of frozen food. The approach is divided into two parts: (1) computation of direct costs on a typical or average case of frozen foods; (2) adjustment of that cost figure to suit a specific product. Individual retailers and firms can use their own accounting data for direct cost allocations per typical case of frozen foods. Adjustment of direct costs can be done handily by the use of index numbers which can be obtained by work sampling methods and time studies. (It is in this area, as referred to in the text, that utmost cooperation between headquarters and store Operator be attained.) The direct cost index should be based on time study data covering the handling of frozen food from receiving off the truck to cabinet stocking. Items clustering around the median time should be taken as 100 and all others scaled prOportionately. Thus, dumped strawberries may have an index of 100 while 73 TA stacked vegetables will have an index of 135 due to the extra time spent for stacking. COMPUTATION: (Numbers are keyed to compilation sheet at end of appendix.) 1. Determine average weekly direct costs for the grocery department. This information can usually be obtained from the regular P & L statement of the store. Care should be taken to include grocery department payroll and taxes, and costs of fringe benefits associated with the payroll sum and front- end labor costs. Whether or not store management and admin— istration costs should be included depends on the policy of the chain. 2. Estimate the weekly direct costs for frozen merchandise. This may be estimated at 5% of total grocery depart- ment labor costs (#1),1 or data may be amassed by the chain to give a more accurate percentage. 3. Estimate the number of cases of frozen food moving through the store in a week. This can be done by tallying invoices (simplest method) or by machine runs of cases delivered to the store. Over a period of weeks receipts closely approximate sales, upon which labor is based. 1"The Dry Groceries Department," loc. cit., 2: it is cited: "This [weekly direct costs for warehouse merchandise] may be estimated at 85% of the total department labor costs if frozen foods are counted as groceries and 90% if grocery personnel do not handle frozen goods. 75 A. Calculate the direct cost for handling a case of frozen food in the store. Divide the average weekly direct costs for frozen food (#2) by the number of frozen cases moving through the store in a week (#3). The result is the direct cost borne by a typical case of frozen merchandise. ADJUSTMENT: 5. Estimate the direct costs for a particular frozen item. Obtain the standard time index, based on time studies conducted by the chain, for the particular kind of product group and pack. The direct cost is then derived by multi- plying the index of standard time by the typical case costs for the store (#A). \J'l COMPILATION SHEET FOR AVERAGE DIRECT COSTS Average weekly costs for the grocery department. Weekly direct costs for frozen merchandise. 5% x (#1) Number of cases of frozen food moving through the store in a week. Direct cost for handling a case of frozen food in the store. In: W’ h) Direct costs for a particular item. direct cost index x (#A) APPENDIX B HOW TO COMPUTE INDIRECT OPERATING COSTS ON A CASE OF FROZEN FOOD This appendix will present, in some detail, the pro— cedure by which a retailer can compute indirect operating costs on a case of frozen food. As with direct costs the approach can be divided into two parts: (l) computation of indirect costs on a typical or average case of frozen foods; (2) adjustment of that cost figure by use of index numbers to suit a specific product. Indirect cost indices should be based on the size of the case in which the merchandise is packed and expressed as the cubage of the case. Average size cases should be taken as 100 and all others scaled prOportionately. For example, a case of six ounce juice packed twenty-four might have a case index of 75 while a case of large pizza packed twelve may have a case index of 175. COMPUTATION: (Numbers are keyed to compilation sheet at end of appendix.) 1. Obtain the average weekly grocery inventory in dollars. This is usually available from the P & L statement of the store or from the periodic inventory record. 77 78 2. Calculate the average weekly inventory of frozen food items in dollars. This can be done by a tally of invoices over a period of weeks. 3. Calculate the number of cases of frozen foods carried in inventory. This figure can be obtained by actual count of inventory over a period of weeks. 4. Obtain general store expenses allocated to the grocery department on a weekly basis. This should include all non-labor costs and appro— priate allocations for rent and depreciation on fixtures, costs of advertising, stamps, etc., most of which can be obtained from the store P & L statement. 5. Compute percentage of frozen food inventory to weekly grocery inventory. This figure is computed by dividing the average weekly inventory of frozen food items in dollars (#2) by the average weekly grocery inventory in dollars (#1). 6. Estimate grocery department indirect costs allocated to frozen food. This figure is computed by multiplying the figure obtained in (#5) by the general store expenses allocated to the grocery department (#4). See addenda to Appendix B.) 7. Compute the overhead charge for a case of frozen food. Divide indirect costs allocated to frozen food (#6) by the number of cases calculated in (#3). This gives the 79 overhead that should be charged to a case of merchandise carried in the inventory each week. ADJUSTMENT: 8. Calculate the overhead or indirect costs for a particular frozen item. Multiply the charge for an average case of frozen merchandise (#7) by the indirect cost index for that item. h) \D SO COMPILATION SHEET FOP AVEPAGE INDIPECT COSTS Average weekly grocery inventory in dollars. Average weekly inventory of frozen food items in dollars. Number of cases of frozen foods carried in inventory. Indirect expenses allocated to the grocery department on a weekly basis. Percentage of frozen food inventory to weekly grocery inventory. 2 #l Grocery department indirect costs allocated to frozen food. (#5) X (#4) Overhead charge for a case of frozen food. Egjg Overhead for a particular frozen item. indirect cost index x (#7) ADDENDA TO APPENDIX B Although an attempt was made to allocate overhead (indirect costs) on the basis of cases carried in inventory, it is recognized that there are some shortcomings in the approach. This is especially true when speaking of frozen foods. Under indirect costs there are two most important expenses: electricity needed to run refrigerated equipment, and depreciation. Progressive Grocer, in a recent study, determined power expense necessary to maintain desired temperature in the frozen food cabinets and walk-in coolers by arranging to have special meters installed to measure the kilowatt hours of electricity used.1 The final figure amounted to 1.8% of frozen food sales or approximately .09% of total store sales. (See Table 10.) Admittedly it is a high expense and must not be overlooked. Depreciation of freezer equipment must also be reckoned with in ascertaining reasonable indirect cost allocations. Progressive Grocer figures show that 1.7% of frozen food sales is a reasonable allocation of the depre- ciation charge which includes a pro-rated share of checkout 1"Sales and Expense Analysis Proves Profitability of Frozen Foods," loc. cit., 73. 81 82 depreciation charged to frozen food on the basis of units handled through the checkouts. In the same study fixture maintenance amounted to 1.0% of sales. The above indirect expenses account for 4.5% of the total operating expenses expressed as a percentage of frozen food sales. This is a substantial amount in relation to the volume apparent in most frozen food departments. Viewing such expense figures it is seen that allo- cation of indirect expense on the basis of cases carried in inventory might not present a wholly acceptable or accurate figure. Therefore it is suggested that the retailer may have to adjust the overhead charge for frozen food up to a more realistic level, if necessary. The following is a recommended adjustment procedure. Assume for an instant that indirect operating expenses expressed as a per cent of frozen food sales closely approxi- mate the Progressive Grocer finding of 13.1%. (See Table 10.) Assume also that frozen food sales as a percentage of store sales closely approximate 5%, (or compute an accurate figure for an individual store).2 Indirect expenses of 13.1% (relation of indirect expenses to frozen food sales) multi- plied by 5% (relation of frozen food sales to store sales) will give indirect expense as a percentage of total store sales which, in this case, is .655%. 2 Williams, loc. cit., 78. 53 Next compute the overhead charge for frozen foods (per the original method) as a percentage of store sales. If this figure is less than the index computed in the above paragraph (.655%), then adjustment must be made at least to the level of the index. The retailer can then proceed to adjust this figure for a particular item as in the original method. It is believed that the approach of increasing the share of indirect expenses is realistic even though it does depart from the original premise. BIBLIOGRAPHY Books Brand, Edward A. A Study of Administrative Policies and Practices in Food Distribution. 1958. (Mimeo— graphed.) Crawford. John W. Advertising: Communications for management Boston: Allyn and Bacon, Inc., 1960. Rogers, John I. Q'uick F1o7en Foods. London: Food Trad Pies S, Ltd., 195-. Periodicals n ,5 A - -. -. 1 , ‘1, H Across the Boyer's Desk. , 1ck Frozen Foods. XXIII, No. 3 (October; IEMXD), 21) ~17 r1 ((0? "Available Space Not Fully Used.” Chain Store Age Exec. Ed., XXV, No. 5 (August, 1959), 11h "Average $95 per linear Foot Weekly Sales: Secret is to Keep Cabinets Full, Minimize Out-of-StOcks," Quick Frozen Foods, XXIII, No. 5 (Fecember, l9tO), 103-105. Braddock. P. H. "Frozens Growth Formula Outlined at Coast Seminar," Supermarket News, November 6, 1961. Cafiero, Parry. "Blame Chains for Woes of Frozen Field," Supermarket News, November 13, 1961. ”Chain Broker lets Out StOps to Promote Frozen Foods," Quick Frozen Foods, XXIII, No. 6 (January, 1961), 42, 116? "Chains Test Angled Frozen Food Selling," Chain Store Age, Groc. Exec. Ed., XXXVII, No. 10 (October, 1961), 170, 173 "Chicago Firm Unveils 3-Tier Jet Freeze Unit," Supermarket News. December H, 1961. "CrayHTOrds Feature Case Lots," Quick Frozen Foods, XXII, No. 1 (August, 1959), 76—77. (W ,_ I» w“ I, ”The Eillon fitudy," Progressive Grocer, XXXIX, NO. 5 (May. 1950). (Reprint.) ”Thel Dry GICDCEIIeS Department, " Food Topics, XVI, No. 5 (M357, 19:1). (Reprint. ) "Facts in Giwocery Distribution," Progressive Grocer, 1961. "500% Incrcwase in Frozen Food Sales in 3 Years at Quality FooCLs, lnc.,H Quick PMIO en Foods, XXIII, No. 3 hoetober, 19607? zh3-gc, z;3. "Freezer Layout is Designed to Directions," Chain Eto Ape , Groc. Exec. Ed., XXXV, No. 3 (March, 19597, i 23. D1 raw Traffic ibmxn All 1e 22— Frmran, Robert A. "Ice Cream-~Sundae, Monday and All Ways, " Colliers, CXXVII, No. 23 (June, 1951), 13-19, 57— 61. n a x , , . ,1 , _ 1960 Frozen.Pood Almanac," Qulck rrozen Foods, XXIII. No. (October, l9tO), 141— LA) H ‘ - 1 '1 ,v \ ,, ‘ 1 T“ , Fmozen Pooos Get Open Door Treatment at Hollywooo nanch IAarket, " Progressive Grocer, XXXIX, NO. 5 (May, 19cc), o5—o’7. Hue 'fi < a 1" ,. e, Prozen.rcxm1 Paradox: Private Label Adds hore Space for .Alvertised Brands at Miami Co-op,H Quick Frozen Foods, XXIII, No. 7 (February, 19c1), 30—32. " ’. r ~ 4‘. 0 'P' 7‘ ' - " Gleater'liificiency in Use o1 cabinet space We Store Age. Groc. Exec. Ed., XXV, No. 9 (3 ij:y)3 1;C"'Ej. A Hard Ikmok at Freeze Drying." Quick Frozen Foods, XXIII, 1k). 9 (April, 1961), 210. H HthITHWi as a Frozen Food Market." Qu1:k Frozen Foods. XXIIJ, No. 3 (October, 19:0), 130. Hughes Wkrrkets Try Unique Frozen Food Placement Experiment," gagggz Frozen Foods, XXXVIII, No. 7 (July, 1959), CO~C2 If I Had PAy way," Quick Frozen Foods. XXII, No. 7 (February, lgéfifl, 92-93. IS the Ptuglic Fading Su iicient Attention to Frozen Foo ods?," Saiggk Frozen Foods, XXIII, No. 3 (October, 1960), ,/ ._‘ (A. "Is There a Limit to the Consumption of Frozen Fruits and Ve betables?," Quick Frozen Foods, XXIII, No. 3 (March, 1961), 370. "Is Their Enough Frozen Food Space?," Chain Store Ag 9, (3roc. Exec. Ed.,XXKV, No. 7 (July, 1959}, 33 3-49. v—1 Kline, Gfaorge A. "How to Build More Profit Into Your Special Fispiay Program," PIQgressive Gro er. XXXIX, 11o. 1 (January. 1960), A9. "Lifeiflagazine Surveys Consumer Attitudes Towards Frozen Foods," Quiex Frozen Foods, XXIII, No. 3 (October, I960),E%¥96. "Life Fkugazine Surveys Consumer Attitudes Towards Frozen Foods," wai- k Floze. Foods, XXIII, No. A (November, '1920), 36437, 132-34. Magowan, I3. A. ”Safeway Stor 5, Frozen Food Titan." Quick Frozen Foods, XXIII, No. 3 (October, 1960) 215—30 2ED_CT 1! a 1 , ‘1 g n " Managermnqt Key to Performance,” Food Merrhanolslng, XXXVII, No. 6 (June. l9e1). 3F-37. Martin, ILawrence. "Growth Factors for Frozen Foods In the 1960's," Frosted Iood Field, XXX, No. A (April. Mueilerg Fobert W., Kline, George E.. and Trout. Joseph J. n\ [A __ . a q _ _ - (,ustomers Buy 25% More When Shelves are Well Eatocked," Progressive Groc r, XXXII, No. 6 (June, 1953), Ao4A3T u q . . New FrozerICode for Truczing Set,H supermarzet Noddy CM*tober 23, 1961- OSbOPn’ JCHWN- "Ad Allowances, Three—Tiered Cabinets NAFFP Eiighlights’" SL1£e erma11i_et Newb. Marfh 12’ 1961. 11 . ‘ , . , .. .QEJPK ELEL1§E_FOOdS' Narxeting Guide; 100 Leading MetrOpoli— taII Frozen Food Markets,” Quick F-ozen Foods, XXII. No. 3 (October, 1960), 103-113. " 1 ~ . x . A, w 1. 1 QUILK ELEEZ§2_FOOGS' MarKetIng Guide: 100 Lea din n2 MetIOPOli‘ Carl Frozen Food Markets,” Quick Frozen Foods. XXIII, No. 38 (March, 1961). 163-93. H .. 1 . . . . QUICK Egggggfll Foods' MarXetlng Quid ; L n tari Frozen Food Markets," Qulc' Fro: n FOO NO. 3 (March, 1952), Isa-13?. El tIOpOli- is, XXIV, Q? at "Pea1iocation of Displa; Spa 0e Results in 23% Innrease in Frozen Food Sales.‘ Progressive Grocer KKKYEI No. a (April , 19:9), 7L. "Reducing Out-of—StOuK Takes Priority Over “ cientiiiw Cabinet Layout,” Quick Frozen Foods. XXIII. No. 9 (April, 19o1), 90—91. "Sales and Expense Anaiysis Pz-ov ves Fvofitsoiii Boods," PIOEISSSiVS G10 er, XL. No. 1 t; or Frozen (Ja 1961), 72-73. mldl‘fj , 9—. Seasonal F'uctuations in tIO ten rood Ssies," QlirX Ezo2; en FOOLS. XXIII. NO. 7' (F8131'1-1d_:'a, ljl) {'43 '“ ' ' , 1“ I Q ‘ V . ., -. ' ..- . 1 ‘ N g . a _ r N Soutnern thain Wins frozen rooq bales Award Q11 A Proxen Foods, XXTIL, N3- 3 (Ortoter, 1JLO) EE~.2Y1. ‘ N (1 ' 2 -. e , {w , *1 m _ " '- "x - '(Uppliers are T010 Ways to Aid StOre r103; n Saies.’ enter— Inat“et News, January 15_ 19 H ".‘T ~. ‘ ' ‘ 1.. F. A. ’2 w H \ m k‘ \ y. Ten Ways to werwnanoise Pro2en EJOos, kholn sto.e «:e, Groc. EXec. Ed., XXVE, No A (Aprii. LVoG). 1t2—63 H )- 0 fi “ _ H o ‘ 'r“ 3 .—. Fr 3‘ .‘ w 1’ ‘ . Tribute to ”la Ienne 51135818. QUiCX rro2on raods. XX1L. J . _ n‘ \ ,. ‘ ..., .. _. \ Us. fifi (flaxwii, 1950), uji{”j€; ‘ . --o \ t _ , , ‘ . ... ‘ " (fi "W , YTwo Simple LeVices Bo ost Proien Pooo Se 95 20% at \entJiy . n 1. -. fl . .3 - . . ‘11pe1‘I‘JTaI‘ri-‘3tS, QIAlC‘K rr‘osen F3005, XXI: 9 N3. 3 (stOJeI‘ 19'30). 3:1. H ‘1 1 -1. -, - ’\. o 4‘1 , f“ n- ’Dne UntapmmxliFVOZen Pooo b ryxBL," ttwnji.;tore Age. Urumg 1?; Exet. Ed.. XXXVi. No. A (Apr-11.~ro1 15%. "What Customers Spent for A1” .odacts in r:oi;;t:1e , Food Topics, XVI, No. 9 (September, 1961). (heprint.\ n . . .. m 3 .3 , ,~. _ «1...: What‘s Happening in U. S. Supermarket tatlneté?," ,wa10; F002;} Fl 8 iii 3 XXX _- NO . 2 (F8bl‘L1LiI'T)’. 1ij,), i :3 . j... 1-9 . Wiiiians. E. W. "Immediate Txends in the F o7en Food Industry," Quick 02‘ en Foo mis, XXIII, 10. i 1950), VY-EO. H Wiilians. E. w. Immediate Tr eno s in the Fro:en rood llduthy " QuivK Ho en Eoofs. XX111. No. 5 ( a; h, 1.4 \L (\7 *__2 v ‘7 \)l l L1 8 Reports buper Market Institute, Inc. "The Super Market Industry Speaks--19€l," Thirteenth Annual Feport by the of Super Market Institute Chicago: Super 1961. Members Maxyet Institute, Inc., Petail Stores. United States Department of‘ Agriculture Ma 1ketlng Se1vice 'Improred Handling of Frozen FOOdS in Jarmeting Research Rep01t Number lOfl (September, 1955). Washington, 1955. ze n Food In'ust1 236 (May, lyié) H . "New DeveIOpments in the Fro Marketing FeseaILh Report Numb e1 Washington, 1958. "Better Utilization 01 Selling Stores." Marketing Fesearrh Feport lashinftfin 19:2. e Alloration for Grocery Items in G1ocer MarLceting Fesearvgh FepoIt Nunter 8O (n.d.) Space in Food N‘Jr JeI ffiCi (11.1l. ). o "SPU([ StOIes. ' Washington, 19;5. University Ol Massachusetts. Frozen Food. A report issued by the Extension Service, University of nassachusetts ind United States Department of A; irultu1e co oper- ating, n.d. Unpublished Material Haseley, A. F. "Frozen Foods-~Profit or Plague;" Purdue University. Purdue Food Petailer Clinir, March El. 1961. (Mimeographed.) "A Study of the Profitability of Unpublished Hunter's Service, Matysiak, Falph Joseph. Frozen Food Departments." srhool of Business and Public ‘ : 1960. thesis, so Michigan State University, "IlllllllllllllllllI