Gross Margin Return on Footage

Role and Importance of GMROF for Retailers


The primary means of earning a profit for a Retailer is via their inventory investment. But in order to do this efficiently, Retailers require tools such as GMROF to help them analyze. GMROF stands for the Gross Margin Return on Footage and measures the inventory productivity by expressing the relationship between the Retailers gross margin and the area allocated to the inventory. GMROF is generally expressed as a percentage, and it gives the retailers an idea of how much returns they’ve gotten per area during a specified period of time.

Tools such as GMROF is essential for Retailers since this can help them identify the profit generating areas within their Retail stores. Hence, Retailers are now able to make more efficient and planned out decisions regarding the increasing or decreasing allocation of categories within the store. Space productivity is critical for successful retailing and GMROF is the tool that allows Retailers to measure it and make changes accordingly.

GMROF helps retailers to increase footfall in their stores, leading to higher sales and more profits. During peak season, tools like GMROF help Retailers display their merchandise in the best possible way, allowing them to take advantage of the extra traffic. 

Sidharth | March 7th, 2018
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