are disposed of at tens of thousand pounds in eacli 

 dealing at other levels. 



2. Higher operating and overhead costs per unit 

 sold are reflected at the retail level. About 67% of 

 retail costs is operating expenses which include 

 mostly salaries of salesmen attending the fish 

 counter. 



3. Spoilage and shrinkage increase progressively 

 as fish products are distributed through marketing 

 channels from the dockside to the consumer. The 

 greatest loss is assumed by the retailer. Most of our 

 retail prices are collected from New York City 

 where the weight loss caused by spoilage and shrink- 

 age was 5.3% in winter and 6.0% in summer — about 

 1.9 and 2.2 times higher respectively than at the 

 wholesale level (Bureau of Commercial Fisheries, 

 Marketing Division, 1966). 



4. Retailers pay about 1.5 cents per pound in 

 winter and 2 cents per pound in summer for quality 

 control offish products on items such as ice, refrig- 

 eration, chemical additives, glazing, brine, and other 

 treatments — about 15% higher than the amount paid 

 by producers and distributors for the same purpose 

 (Bureau of Commercial Fisheries, Marketing Divi- 

 sion, 1966). 



Despite the high costs involved in retailing fish 

 products, retail markups for most fish products 

 trended downward during the last decade for shell- 

 fish (except blue crab meat) and during the last two 

 decades for groundfish (except flounder and ocean 

 perch fillets) and canned fish products (except 

 salmon) (Table 6). 



Fish products with a relatively high unit price 

 usually have low retail markups. Overhead costs are 

 often allocated to products not according to their 

 value but to the volume of floor space occupied. 

 High-priced peeled shrimp, live lobsters, sea scal- 

 lops, and halibut and king salmon steaks illustrate 

 this observation. Those products that have easily 

 discernible quality and are purchased relatively fre- 

 quently by consumers are also given low retail 

 markups because of the large tumoverof their sales. 

 That is one of the reasons why canned tuna retail 

 markups dropped rapidly for the last 4 yr. 



Comparison of Price Changes at Retail 

 Level with those at Other Levels 



As was indicated in the discussion of retail food 

 market behavior, retail prices moved upward with- 

 out much fluctuation as did price at other levels. The 

 trend of retail price movements reacts with price 



trends at other marketing levels differently from one 

 product to another (Table 7). A comparison of the 

 price movements of the four levels over the last two 

 decades can be summarized as follows: 



1 . Products whose retail prices increased at a 

 slower rate than prices at the other three marketing 

 levels are: 



a. halibut steaks and fresh sea scallops (distinc- 



tively slower); 



b. fresh haddock fillets, raw peeled shrimp, and 



live American lobsters (moderately 

 slower); and 



c. canned chunk tuna (slightly slower). 



2. Products whose retail prices increased at a fast- 

 er rate than prices at the other three marketing levels 

 are: 



a. fresh flounder fillets (moderately faster), and 



b. frozen ocean perch fillets, canned pink 



salmon, and fresh blue crab meat (slightly 

 faster). 



3. Only one product, fresh cod fillets, had its retail 

 prices increased at approximately the same rate as 

 prices at other levels. 



COSTS AND PROFITS— THE COMPO- 

 NENTS OF PRICE SPREADS 



To develop a better understanding of price 

 spreads and their variation between products and 

 that between marketing levels of each product, it is 

 necessary to examine the services performed in get- 

 ting the fish products from dockside to the retail 

 market and the costs and profits involved in perform- 

 ing these services. 



Source of Data 



Estimates of costs and profits are compiled from 

 the industry and trade series reports published by the 

 Bureau of the Census (1967b; see Appendix Tables 

 19 and 20), and the business income tax returns and 

 corporate tax returns published by the U.S. Internal 

 Revenue Service (1968a. b) (Appendix Tables 16- 

 18, 21, and 22). They represent U.S. national aver- 

 ages for all firms engaged in the manufacture and 

 trade of fishery products at the 4-digit level'- of the 



'- In the Standard Industrial Classification system, the first 2 

 digits represent amajor group: the first 3 digits, iit>ri)up: and the 

 first 4 digits, a suhi;nntp. For example: in the manufacturing 

 industries, 2-digit major group 20 is Food and Kindred Products; 

 3-digit group 203 is Canned and Preserved Food; and 4-digit 

 sub-group 2031 is Canned and Cured Seafoods. 



14 



