Shelf gap model
Model your shelf gap
An illustrative model of the revenue and gross profit exposed to shelf execution errors. It starts from the base case in The Perfect Store Gap. Replace any assumption with your own and every step of the arithmetic updates.
Across 50 stores, per year Illustrative
€567,000
gross profit at risk
€1.62 million revenue at risk
| Category sales per store, per year | €648,000 |
|---|---|
| Modeled sales loss | 5% |
| Revenue at risk per store, per year | €32,400 |
| Gross profit at risk per store, per year | €11,340 |
| Revenue at risk per store, per trading day | €108 |
The arithmetic
Every result comes from four lines. Nothing is weighted, smoothed or compounded.
- Category sales per store
- 180 transactions × €12 × 300 days = €648,000
- Modeled sales loss
- 20% exposure × 25% severity = 5%
- At risk per store
- €648,000 × 5% = €32,400 revenue; × 35% margin = €11,340 gross profit
- At risk across the chain
- per store × 50 = €1,620,000 revenue and €567,000 gross profit
How sensitive is it?
The result moves in proportion to exposure and severity, the two assumptions that are hardest to know. The grid shows gross profit at risk across your chain for ten points either side of your values. Yours is outlined.
What the model leaves out
It is a way to size the question, not a forecast of your results.
- Sales kept through substitution. Severity counts only the share of exposed sales that is lost.
- Margin changes when a shopper substitutes, and wider effects on a launch’s trajectory.
- Promotional funding spent on displays that were not in place.
- The cost of checking shelves, and anything gained by correcting them.
- Compounding. The model is linear: double an assumption and the result doubles.
See your shelf gap
The model sizes the question. A pilot answers it with your categories, your stores and the shelves your shoppers actually meet.
If you have changed the model, your scenario is added to the enquiry for you to edit.