RETAIL STORE AUDIT

ORG-MARG
 RETAIL STORE AUDIT
What it is?

• …..is a periodic (monthly) monitoring of

a panel of retail outlets
• collecting data on Purchases, Stocks, and
Sales for product categories of interest
• And projecting using statistical
techniques to arrive at market estimates.
 RSA - METHODOLOGY
Sales •Higher Sampling
Fractions assigned to
higher town classes
because of higher
level of heterogeneity
•Towns randomly
Picked up through
iteration from each
Town Class till
Sampling objectives
fulfilled
No. of Towns
 METHODOLOGY-SAMPLING FLOW CHART

All India
Census (GOI) U/R

1st Stage
State / State / State / State /
Stratification State Group1 State Group2 State Group3 State Group4

2nd Stage Metro TC1 TC1A TC II TC III TCVI

Stratification 10 lac+ 5-10 lac 1-5 lac 50k-1lac 20k-50k <20k

Sample Town
Town1 Town 2 Town 3 Town 4
Selection
 Coverage-Towns/Villages

All North East West South

India Zone Zone Zone Zone
No. of
Sample 367 103 74 91 99
Towns
No. of
Sample 986 251 286 206 243
Villages
 METHODOLOGY-SAMPLING FLOW CHART
State /
State Group1
e.g. Maharashtra/Goa

Town Class
Census of e.g. T.C.II
Retailers

Town I Town II Town III Town IV

3rd Stage OT 1 OT 2 OT 4 OT5

Stratification OT 3 OT 6 OT7
Grocer Gen. Food Cosmet.
Chem Pan+ Others
Store Stores Store

Dealer
Dealer Dealer Dealer Dealer
Selection Class I Class II Class III Class IV
 METHDOLOGY
-Outlet Selection
• Census data analysed and Outlet Type
and Dealer Class of all Retailers
determined
• A matrix of Outlet Type and Dealer Class
formed and all dealers distributed among
all cells
• Sampling Objectives assigned to each cell
of the matrix
• Retailers randomly selected from every
cell based on objectives
 Coverage-Panel Spread
Audit Type No. of No. of No. of Collection
Dealers Towns Villages Method
FMCG 10733 367 986 Stock

Pharma 1933 367 986 Purchase

Lubricants 2533 258 - Stock

Liquor 1056 25 - Stock

Lighting 11815 367 986 Stock

Categorisation of Outlets in ORG-
MARG Retail Audit
By TOC By Dealer Class

TOC/month % Class* %
> 1.01 lakh 2.2 A 2.8
71,000 - 1.0 4.5 B 11.3
41 - 70,000 15.5 C 23.2
16 - 40,000 23.5 D 26.2
6 - 15,000 24.9 E 36.5
<5,000 29.4 -- --
 Retail Audit-The Exercise
• The retail audit is a demanding but
straightforward operation.

• Past Stocks + Deliveries - Present Stock =

Sales

• The formula is simple but procedure is

infinitely detailed.
 Retail Audit - Outputs (Sales
Analysis)
• Consumer Off take –
Sales Quantity = Opening Stock + Purchase -
Closing Stock

• Market Share (MS)

Sales of Product
MS % =------------------------- x 100
Total Sales

• Growth (CHG)
Sales (Current Period) - Sales (SPLY*)
CHG % = ------------------------------------------------- x 100
Sales (SPLY)
* Same Period Last Year
 Retail Audit - Outputs
(Purchase, Stock and Dealer
Penetration)
• Purchase (PUR)
– Purchased by dealers by volume during the month.
• Stock (STK)
– Volume of stock with the retailer in current month at
the end of audit.
• Dealer (DLR)
– Percentage of dealers having opening stock, closing
stocks or has purchased during the audit period.
• Stock Turnover Ratio (STR)
– At present rate - number of days the present stock will
last with the retailers.
Stock
STR = ------------- x (30 days)
Sales
 Retail Audit – Outputs (Special Dealer
Analysis)
• Per Dealer Off take (PDO)
Sales by Volume
– PDO = ------------------------------
Total No. of Dealers*
* During the audit period

• Out of Stock Dealers (OSD)

Out of Stock Dealers
• OSD % = ------------------------------- x 100
Total Dealers
-Not reporting closing stock but reporting
purchase or sales.
 Retail Audit – Outputs (Special Dealer
Analysis)

• Weighted Distribution (WD)

Total value of dealers

reporting for a company
• For a Co. or (or brand) for the category
brand WGHT % = ---------------------------------- x 100
Total value of that category
 APPLICATION OF RSA
-Uses of Retail Audit
• Market Size – • Distribution Strategy
Value / Volume • Pipeline Stocks
• Market Growth - • Market Entry/ Exit
Value / Volume Planning
• Geographical • Monitoring New
Segmentation Brand/Pack Performance
• Price • Impact Of Promotion
Segmentation • Tracking Competitors
• Brand Health Promotions