Economic evaluation of shelf‐space management in grocery stores

Abstract

AbstractRecently, many commodity groups have shifted promotion expenditures from generic advertising to non‐advertising activities such as in‐store promotion programs. Accordingly, corresponding evaluation methods need to be developed to identify the benefits of these non‐advertising programs. We develop a general framework to assess product sales performance of in‐store shelf‐space management programs in retail stores. The framework was applied to the evaluation of dairy case management programs in the Northwestern Hudson Valley market, New York. Simulation results on fluid milk product sales indicate that preferred product locations vary between smaller convenience stores and larger supermarket retailers. On average, the dairy case management program was estimated to improve product sales 6 to 10% at the retailer level. [Econlit subject codes: M300, Q130] © 2007 Wiley Periodicals, Inc. Agribusiness 23: 583–597, 2007.