16 BULLETIN 1442, U. S. DEPARTMENT OF AGRICULTURE 
The gross margin is a particularly important figure to the retail 
meat dealer. It is out of the amount which the gross margin per- 
centage represents that he must meet his expenses of operation before 
realizing a profit. Numerous factors contribute to variations in 
margin, the more important of which are probably those identified 
with inefficient methods of operation. 
As observed in Table 4, there was a tendency for loss stores to 
operate at a lower gross margin percentage than the profit stores. 
The number of stores operating at a loss was few, so that the results 
should be interpreted with due recognition of this limitation. More 
conclusive results are presented in the later section devoted to profits 
in individual retail meat markets. In so far as the data presented in 
Table 4 are concerned, the tendency toward lower gross margin per- 
centages was most definitely marked in the group of unlimited-de- 
livery stores. This situation is probably to be expected, since this 
group contains the larger number of stores and may be regarded as 
a somewhat more representative group. 
Data were not available to determine definitely why this tendency 
toward lower margin percentages should be found in loss stores. 
It was obvious, however, that any cause which contributed toward 
inefficiency in handling or selling reduced the total margin possible 
from the sale of a definite quantity of goods, since gross margin 
represented the difference between net receipts from sales and the 
cost of the goods sold. 
When gross margin percentages are low the more important fac- 
tors which should be examined by the proprietor are careless weigh- 
ing, excessive trimming, deterioration and spoilage occasioned by 
improper refrigeration, possible dishonesty of employees, lack of 
accurate information on the part of the proprietor regarding the 
cost of doing business, a low-price policy which is not based on 
adequate information regarding the quantities of various cuts yielded 
by a dressed meat carcass, and lack of careful buying. 
It is attention to factors such as these which marks the efficient 
dealer and this efficiency is no doubt reflected in the larger gross 
margin realized by the more efficient dealer. The fact that loss stores 
exhibit a tendency toward lower gross margin percentages should, 
therefore, be of particular significance to proprietors of such stores. 
The influence of service as a factor in cost variation was well illus- 
trated in the differences in gross margin among stores of the three 
types. The carry-store class, which offered the least service, had the 
lowest margin, 22.98 per cent. The limited-delivery group, offering 
only limited service, was next with a slightly higher percentage 
margin of 23.09, and the unlimited-delivery class was highest with a 
margin of 24.18 per cent. 
The effect of increasing volumes of net sales in reducing gross 
margin percentages was not shown generally by the data. In the 
carry class, however, the profit-and-loss combined group showed a 
tendency toward a decrease in gross margin percentage as volume 
of sales increased. The higher per cent of 23.21 for the stores with 
net sales over $100,000 was attributable to the fact that four of these 
five stores were located in the Pacific coast cities, where expenses in 
percentage of sales were somewhat larger than in other sections of 
the country. The limited-delivery group did not show any marked 
