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Retail Management
Midterm Study Guide Part Deux
| Question | Answer |
|---|---|
| Income Statement | Summarizes a firm's financial performance over a period of time, typically a quarter (three months) or a year. |
| Gross Margin Percentage | Gross margin divided by net sales. Retailers use this to compare the performance of various types of merch and their own performance with that of other retailers with higher or lower levels of sale. |
| Operating Profit Margin | The gross margin minus operating and extraordinary recurring expenses. Also called Earnings Before Interest, Taxes, and Depreciation (EBITDA) |
| Net Profit Margin | The operating profit margin minus interest, taxes, and depreciation. |
| Current Assets | Assets that can normally be converted to cash within one year. = Cash + AR + Merch Inventory +Other Current Assets |
| Liabilities | A company's debts, such as its accounts payable, which it owes to its vendors for merchandise. |
| Current Ratio | Short-term assets divided by short-term liabilities. It evaluates the retailer's ability to pay its short-term debt obligations. |
| Quick Ratio | Short-term assets less inventory divided by short-term liabilities. It is a more stringent test of financial strength than current ratio because it removes inventory from short-term assets. |
| Comparable Store Sales Growth | Compares sales growth in stores that have been open for at least one year. This comparison assesses the first component in sales growth, and thus indicates how well the retailer is doing with its core business concept. |
| Common Area Maintenance (CAM) | The common facilities maintenance that shopping center management is responsible for. |
| Freestanding Sites | Retail locations for an individual, isolated store unconnected to other stores; however, they might be near other isolated stores or near a shopping center. |
| Inner City | A low income residential area within a large city. |
| Neighborhood Shopping Centers | Attached rows of open-air stores, with onsite parking, usually located in the front of stores. |
| Power Centers | Shopping centers that consist primarily of collections of big box retail stores, such as full-line discount stores (Target), off-price stores (Marshalls), warehouse clubs (Costco), and category specialists (Best Buy, Sports Authority). |
| Shopping Malls | Enclosed, climate-controlled, lighted shopping centers with retail stores on one or both sides of an enclosed walkway. |
| Regional Malls | Enclosed malls that are less than 800,000 square feet. |
| Super-Regional Malls | Enclosed malls that are more than 800,000 square feet. |
| Lifestyle Centers | Shopping centers that have an open air configuration of specialty stores, entertainment, and restaurants, with design ambiance and amenities such as fountains and street furniture. |
| Mixed-use Developments (MXDs) | Combine several different uses into one complex including retail, office, residential, hotel, recreation, or other functions. |
| Store-within-a-store | Locations involve an agreement in which a retailer rents a part of the retail space in a store operated by another independent retailer. |
| Convenience Shopping | When consumers are primarily concerned with minimizing their effort to get the product or service they want. |
| Traffic Flow | The number of vehicles and pedestrians that pass by the site. |
| Accessibility | The ease with which customers can get into and out of the site. |
| Cumulative Attraction | A cluster of similar and complementary retailing activities will generally have greater drawing power than isolated stores that engage in the same retailing activities. |
| Primary Trading Area | The geographic area from which the shopping center or store site derives 50 to 70 percent of its customers. |
| Huff Gravity Model | Used to predict the profitability that a consumer will patronize a store. |
| Analog Approach | The retailer simply describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics. |
| Fixed-rate Lease | A retailer pays a fixed amount each month over the life of the lease. |
| HRM Performance measures | Employee productivity, turnover, and engagement. |
| Productivity | The sales generated per employee calculated as net sales divided by the number of full-time employees (FTEs). |
| Turnover | Number of employees voluntarily leaving their job during the year divided by the number of positions. |
| Engagement | An emotional commitment by an employee to the organization and its goals. |
| HR Triad | HR professionals, store managers, and employees. |
| Employment Branding | Involve undertaking marketing research to understand what potential and current employees are seeking as well as what they think about the retailer. |
| Commission | An incentive based on a percentage of their sales made or margin generated by the employee. |
| Organization Culture | The set of values, traditions, and customs of a firm that guides employee behavior. |
| Illegal Discrimination | Refers to the actions of a company or its managers that result in a protected class being treated unfairly and differently from others. |
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