IDEAS home Printed from
   My bibliography  Save this article

Costs and Margins in the Retail Supply Chain


  • Patrick D'Arcy

    (Reserve Bank of Australia)

  • David Norman

    (Reserve Bank of Australia)

  • Shalini Shan

    (Reserve Bank of Australia)


Retail goods are an important component of the consumption basket and changes in their prices have had a significant influence on CPI inflation over the past decade, particularly following movements in the exchange rate. To help understand the drivers of inflation for retail goods, this article sets out the major costs and margins involved in supplying retail goods to consumers. Notwithstanding dispersion across different types of goods, on average, around half of the final price of retail items can be attributed to the cost of the goods themselves, with the remaining half covering the gross margins of wholesale and retail firms in the distribution supply chain. The costs incurred by distributors are broadly split between labour and other input costs, with distributors’ profit margins accounting for a little under 10 per cent of the final sale price. These shares have remained relatively stable for at least the past decade.

Suggested Citation

  • Patrick D'Arcy & David Norman & Shalini Shan, 2012. "Costs and Margins in the Retail Supply Chain," RBA Bulletin, Reserve Bank of Australia, pages 13-22, June.
  • Handle: RePEc:rba:rbabul:jun2012-02

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Malik Cahyadin, 2017. "Determinant Factors of Trade Industry Performance in Indonesia: AHP Approach," GATR Journals jber130, Global Academy of Training and Research (GATR) Enterprise.
    2. David Jacobs & Thomas Williams, 2014. "The Determinants of Non-tradables Inflation," RBA Bulletin, Reserve Bank of Australia, pages 27-38, September.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rba:rbabul:jun2012-02. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paula Drew). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.