Model your shelf gap
An illustrative model of what shelf execution errors cost. Replace any assumption with your own; the arithmetic updates as you type.
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?
Exposure and severity are the hardest assumptions to know. The grid shows ten points either side of yours, 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.