wholesaler's "net cost" and the product equalled the maximum or ceil- 

 ing price that could be charged. Similarly, retailers were classed in 

 certain categories according to their volume of sales. Four groups 

 were established and for each group a maximum percentage mark)-up by 

 commodity class was specified. A retailer could determine his maximum 

 allowable mark-up for most any commodity" simply by reference to the proper 

 table issued in Office of Price Administration regulations. 



Until recently when ceiling prices on all canned foods were dis- 

 pensed with the Office of Price Stabilization (O.P.S), procedure was 

 the same as that required under OoP.A. for obtaining wholesale ceiling 

 prices. The retailer's procedure was also the same as under O.P.A. ex- 

 cept that the value limits of each of the four group classifications 

 based on volume of sales was increased. This was probably brought 

 about by the increased growth of independent super market and chain 

 store type merchandising and higher prices with resultant higher sales 

 volumes. 



Under 0. P. S. regulations the nHximum permissible retail iiark-ups 

 applying to canned tuna, ranged from 21 to 25 percent of the retailer's 

 purchase price. Seldom was the full 25 percent mark-up applied to 

 canned tuna at the retail level. In many instances the margins of re- 

 tailers were far below those permissible. This indicates that competi- 

 tion in retailing c-anned tuna is effective and the nargins on that 

 product are probably reasonable. An example of the relatively low 

 margins for canned tuna is given in a comprehensive study of seven 

 super markets, located in Providence, Rhode Island published in 

 1952 . This study was made during 12 weeks in October, November and 

 December, 1950. The gross profit margin as a percent of sales for 

 canned tuna was 13. 3D) percent . If the margin is computed as a mark- 

 up on the basis of cost, as was the practice under O.P.S. regulations, 

 the result is somewhat higher — 15.34 percent. This mark-up of 15.34 

 percent, based on cost was lower than any allowable mark-up on canned 

 fish for retail stores put into effect by the Office of Price Sta- 

 bilization immediately after this study. Since thip particular case 

 study covered only a 12-week period in a specific area, the results 

 could hardly be used as an indicator of national retail margins for 

 canned tuna. The results do show that efficient retail outlets do and 

 can charge quite low mark-ups for canned tuna and reports indicate 

 that this is prevalent and not exceptional over the nation.. 



The study also demonstrates that individual margins are not a 

 reliable measure of whether a particular commodity is being handled 



385 



