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Working Papers (1996), ESSEC Business School

Estimating Shelf-space Elasticity for Product Categories : A Preliminary Step to Hierarchical Space Allocation in Stores Belonging to a Chain

DESMET Pierre , RENAUDIN V.

To re-allocate space in an existing store betweeen different categories of products, the manager can use sales-space elasticities evaluated from the performance of comparable stores. This paper presents the empirical estimation of sales-space elasticities for each product category of a town-center supermarket chain. Results show that space-elasticities are increasing with the impulse buying rate of the product category and decreasing with the size of the store. The category effect seems to be higher than the store size effect.

DESMET, P. and RENAUDIN, V. (1996). Estimating Shelf-space Elasticity for Product Categories : A Preliminary Step to Hierarchical Space Allocation in Stores Belonging to a Chain. ESSEC Business School.