Why margin moved

Illustrative figures.

The same supplier of household and personal-care products, six products and five grocery chains, this year against last. Gross margin after all trade terms fell by 407 thousand euros, from 22.5% to 20.5% of net-net sales.

The headline

List-price rises matched higher costs. Deeper terms at Retailer A took the margin: three of its products lost 708 thousand euros, more than the whole fall of 407.

From last year’s gross margin to this year’s (EUR thousand)

Gross margin after all trade termsRaised marginLowered marginAxis starts at 9,000
9,00010,00011,00012,00013,000EUR thousand10,656Last year'smargin22.5% of net-net+335Volume−83Mix+1,758Price−693Tradeterms−1,724Cost10,249This year'smargin20.5% of net-net
9,00011,00013,000EUR thousandLast year's margin22.5% of net-net10,656Volume+335Mix−83Price+1,758Trade terms−693Cost−1,724This year's margin20.5% of net-net10,249

Net-net sales, EUR thousand: 47,427 last year, 49,951 this year. Cases sold, thousand: 2,133 last year, 2,200 this year.

Where the fall sits: the three product-customer pairs that lost the most

EUR thousandVolume and mixPriceTrade termsCostChange in margin
Laundry capsules, Retailer A+67+150−377−240−400
Laundry liquid, Retailer A−123+115−100−92−200
Dishwasher tablets, Retailer A+45+95−124−124−108
The remaining 27 product-customer pairs+263+1,398−92−1,268+301
All 30 pairs+252+1,758−693−1,724−407

What the figures say

List price matched cost

List prices rose 2.9% and added 1,758 thousand euros. Higher cost per case took 1,724 thousand of it.

Terms took the margin

Trade terms cost 693 thousand euros more, 668 thousand of it at Retailer A: its volume rebate went from 4% to 5%, and promotion funding and display fees on capsules doubled. On the three products in the table, terms alone cost 601 thousand.

Nothing left in “other”

Volume, mix, price, trade terms and cost add up exactly to the change of −407 thousand, and each opens to the products and customers behind it.

Key tables export to Excel with their formulas. Illustrative figures. Price is valued at list price; discounts and rebates on the increase sit in trade terms. Mix is valued at last year’s margin per case. Per pair, volume and mix are shown together; the bridge splits them for the total.

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