Frozen Foods: Margins, Costs, and Returns in Relation to Display Space

Report Introduction: Sales of frozen food (including frozen meat and fish but not ice cream) rose rapidly after World War II. In 1958, they accounted for 4.3 percent of total sales of retail food stores. Despite forecasts and projections for similar increases, the rise in frozen food sales has tapered off substantially since then. In 1962, these sales accounted for 4.6 percent of total sales of retail food stores. One possible cause for this leveling out may be the retail merchandising and pricing practices for these products. The purpose of this report is to evaluate retail pricing and merchandising practices for frozen foods by analyzing: (1) The sales and profit response from altering the amount of display space for the frozen food department and major product groups within it. (2) The costs, margins, and returns for major commodity groups of frozen food products. Through such information, public officials, farmers, and all segments of the frozen food industry will have a better understanding of the retail marketing functions. Distributors especially may find the principles presented in this report helpful in guiding their own pricing and merchandising policies.