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Chapter 8: Distribution and Logistics

E-ACTIVITY: DISTRIBUTION CHANNELS (p. 312)

Activity: Do a Trend Analysis of Wholesale and Retail Sales

The players in the channels of distribution include manufacturers, importers, wholesalers, and retailers. Where is the largest growth trend, wholesalers or retailers? What category of goods has seen the most increase? In this activity, you will examine the current trends for both of these channels of distribution and determine significant trends.

  1. The first item you will examine is the markup or margin of various trade groups by wholesalers at the "Revenues and expenses in the wholesale trade sector, provinces and territories" table at the Statistics Canada Web site.

    • What was the average gross margin on all trade groups in Canada?
    • List the five trade groups with the highest gross margin.
    • Do you purchase any items within these top five trade groups?
    • What does this margin do to the prices you have to pay?
    • What does the gross margin include?

  2. In groups of four, determine the trends in retail and wholesale sales between 1998 and the most current year given on the Statistics Canada Web site. Work in partnerships, with one partnership doing a trend analysis of wholesale sales by commodities and the other partnership doing a trend analysis of retail sales for the same period. To perform a trend analysis, use 1998 as a base year and find the percent increase or decrease for each subsequent year over that base year. For example, if sales of food products were $1000 in 1998 and $1500 in 1999, the formula would be [($1500 - $1000) /$1000] ´ 100. Use spreadsheet software to do your trend analysis.

    Collect data from the Statistics Canada site for wholesale sales and for retail sales. The partners doing the retail sales trend analysis should use the major grouping of commodities only, for example, food, drug and patent medicine, stores, and clothing.

    Use the following organizers to help in your analysis: "Trend Analysis-Retail Sales by Commodity, 1998-2001," and "Trend Analysis-Wholesale Sales by Product Category, 1998-2001." Click here to download the organizers.

TREND ANALYSIS-RETAIL SALES BY COMMODITY, 1998-2001

 
1998 ($000)
1999 ($000)
Inc/Dec (%)
2000 ($000)
Inc/Dec (%)
2001 ($000)
Inc/Dec (%)
Canada (example)
246 674 830
260 779 457
6
277 033 166
12
289 129 995
17
               
Food              
Drug and patent medicine stores              
Clothing              
Furniture              
Automotive              
General merchandise stores              
Other retail stores              

 

TREND ANALYSIS-WHOLESALE SALES BY PRODUCT CATEGORY, 1998-2001

 
1998 ($000)
1999 ($000)
Inc/Dec (%)
2000 ($000)
Inc/Dec (%)
2001 ($000)
Inc/Dec (%)
Canada (example) 237 836 642 246 674 830 3.7 260 779 457 9.65 289 129 995 21.57
               
Food products
             
Beverage, drug, and tobacco products
             
Apparel and dry goods
             
Household goods
             
Motor vehicles, parts, and accessories
             
Metals, hardware, plumbing, and heating
             
Lumber and building materials              
Farm machinery, equipment, and supplies              
Industrial and other machinery, equipment              
Computers, software, and other electronic              
Other products
             

 

  1. When each partnership has finished their trend analysis calculation, they will determine significant trends. What was the general trend for all of Canada? What commodities increased the most? Which commodities increased the least? What year or years had the largest increases? Come up with additional questions and answers. Then regroup and report your findings to the whole group.