Planning and Budgeting for Effective Retail Merchandise Management

The field of retailing is constantly changing as new product and marketing opportunities develop. A major challenge to the retailer is keeping abreast of the changes that affect his firm's operations. One of the prime areas of concern, particularly for the small retailer, is effective retail merchandise management. The retailer must be able to plan and budget merchandise requirements to avoid lost sales, lost profits, potential obsolescence, and lost opportunity costs due to a too large, out-of-date inventory. Stock level planning methods include the basic stock, percentage variation, week's supply, and stock-sales ratio methods. Major decision-making areas in retail merchandise management are: 1. sales forecasting and planning, 2. merchandise planning, 3. merchandising budgeting, 4. inventory analysis, 5. purchasing activity, 6. selling activity, and 7. merchandise analysis and control. At a time when the number of daily operating decisions is increasing, a procedure for effective retail merchandise management is imperative. Retail merchandising is crucial for day-to-day sales and long-run survival as well.