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IGD.com - Food & Grocery Industry Glossary of Terms Category: Agriculture and Industry > Food & Grocery Industry Date & country: 18/12/2007, UK Words: 91

Year-on-year
YOY - A direct comparison of results with the same time in previous years.

Wholesale selling price
WSP - The price at which a wholesaler will sell products to their customers.

Waste support
The support customers expect from suppliers to mitigate the effects of product waste.

Waste as percentage of sales
A common method of assessing levels of waste. A maximum level will be set during negotiations.

Vendor creation form
VCF - A form (or series of forms) all new suppliers complete including company information, product information/specifications etc.

Unique selling proposition
USP - The real point of difference of a product, in comparison to others. It could be a wide variety of things including taste, packaging, origin and so on.

UDEX
Universal Descriptor Exchange - Allows suppliers and their customers to have a ‘common currency` of product descriptions. It is used by several large supermarkets and foodservice companies. www.udex.com

TI
Number of cases per pallet layer.

Trading objective
Usually a commercially based goal, often centred around sales, profit or market share.

Supply chain
Logistics - The chain through which a product travels from raw materials to consumption.  More...

Superstore
A store with a sales area of 25,000 sq ft (2,250 sq m) - 40,000 sq ft (3,600 sq m), selling a broad range of mainly grocery items. Non-food may also be present.

Sub-category
A sector within a product category (e.g. if the category is desserts, a sub-category may be chilled desserts).

Supermarket
A store with a sales area of 3,000 sq ft (280 sq m) - 25,000 sq ft (2,250 sq m), selling a broad range of mainly grocery items.

Stock Keeping Unit
SKU - A uniquely identifiable line within a stores range. One product may have many different variations e.g. 20% extra free. Each of these variations is an individual stock keeping unit.

Shelf edge label
SEL - A descriptor that identifies the adjacent product on shelf. The shelf edge label contains information covering selling price, barcode, product description etc.

Service level
Product availability - Extent to which demand is met by product availability. Usually expressed as a percentage of product availability versus requirements.

Sensory
Organoleptic - Eating qualities of a food e.g. taste, texture, mouth feel.

Serial shipping container code
SSCC - The unique identification of a logistic unit using an 18-digit data structure.

Sector
A sub-division of a market, where retailers adopt a similar store format, e.g. convenience, discounting, supermarkets.

Seasonal
Reference to a specific time of year when a product is available or when there is a specific focus on a product.

Route to market
The supply chain that a product follows to get to the final consumer.

Sales based ordering
Automated store ordering - A system of building a product order by using EPoS data to generate an order for future stock requirements.

Retail selling price
RSP - The price at which a retailer sells a product to the consumer.

Regional food group
RFG - Represent quality, small and medium sized food and drink producers in their region. Their aim is to assist business development.

Regional distribution centre
RDC, Central distribution centre, Depot - Warehouses designed to hold stock ready for onward distribution to retailers. Most retailers have a network of RDCs. Small suppliers may or may not be required to deliver into an RDC.

Range cycle
A period of time during which a product or range can be introduced or deleted to a store or depot.

Range change
The process of changing the level of distribution of a product or range. Can cover the introduction of new lines, deletion of existing lines, change in number of stores stocking the product.

Promotion
Some form of special offer that provides additional benefit to buying one or more products. Promotions follow a variety of models (e.g. BOGOF).

Proof of delivery
Often a form requiring customer signature when product changes hands.

Range
Distribution - Choice/number of products available in a given store or depot.

Product support
Marketing support - The support customers may expect suppliers to give listed products. This may come in many forms.

Product
Stock keeping unit, SKU - Individual line within a product range or category. Each variation of a product (e.g. different size) is a separate SKU.

Point of sale
PoS - The most literal meaning is the physical location where the product is displayed for sale (e.g. shelf or checkout). PoS is also used in reference to marketing material displayed with the product.

Pallet
GKN blue, Euro pallet - A flat, open structure (usually constructed of wood) used to hold and transport merchandise through the supply chain.

Planogram
Stocking plan - The medium of communicating a range layout to retail store or distributor.

Own-brand
Own-label, Retailer label, Retailer brand - A product showing the retailer`s brand name. Retailers will demand very strict specifications for local/regional products carrying their name. More...

Overrider
Rebate, Discount - Payment made by a supplier to their customer based on a percentage of product sales over a set time period.

Outer case code
TUC - Barcode on outer case used to electronically track product through the supply chain.

Outer case
Case - The packaging unit in which products are delivered from supplier to retailer.

Out of stocks
Stock outs - Term used when a product is unavailable at a given point in supply chain (e.g. at point of sale or RDC).  More...

Operator
Foodservice operator - Companies who own/manage foodservice outlets (e.g. restaurants and pubs etc). The term is often used to refer to national chains but also includes independent operators.

New product development
NPD, New product instructions - Process involved in development and launch of new lines, either branded or own-label.  More...

Merchandising
The allocation of shelf space and physical layout of products within a category or fixture.

Market share
Percentage of business in terms of value or volume, held by a product, brand or company. Used to indicate relative strengths or weaknesses within a market place.

Market
A division of retailing, devoted primarily to the sale of a similar range of goods, eg: grocery, clothing, electronics, pharmacy.

Local sourcing
Regional ranging - A process of matching consumer needs on a local/regional basis with selected products likely to be demanded.  More...

Local food
There is considerable debate as to identifying a definition of local food. IGD consumer research has found that 63% of consumers see local food as from the county they live in or within 30 miles of where they live.

Legal
Usually referring to the ‘legal department` responsible for ensuring products and actions meet legal requirements.

Lean Operations
Lean operations encompass a set of principles to drive greater value out of business processes by making them more efficient and more effective. It is a business system for organising and managing product development, operations, suppliers, and customers that requires less human effort, less equipment, less time, less space â€` while coming closer an …

Key performance indicators
KPI, Key performance measures - Measures deemed essential in monitoring business performance (e.g. service level, sales, profit etc).

Just-in-time
JIT - A manufacturing/delivery process where a minimum of goods are kept in stock. Items are planned to arrive precisely at the time they are required for use or dispatch.

Incremental
Incremental sales - The additional sales of a product occurring directly as a result of a specific activity (e.g. sales promotion).

Hi-Low
Trading strategy driven by product offers and discounts.

Hypermarket
A store with a sales area of 40,000 sq ft (3,600 sq m) or more, selling a broad range of grocery items, with some non-food participation.

HI
Number of cases high per pallet.

Gross margin (retailer)
Margin - Difference between cost price and selling price. Expressed as a cash figure, or a percentage.

HACCP
Hazard Analysis and Critical Control Point - System applied to monitor and control microbiological, physical and chemical factors affecting food safety and acceptability.

Forecast
Calculation of future sales of a product. Used to help planning.

Frequency of purchase
A measure of how often a product is purchased by consumers, over a given time period.

Fixture
The physical space from which a product is sold in a retail store. It can include shelving, peg boards, chiller cabinets, freezers etc.

Footfall
Consumer traffic into a store, or a specific area of a store.

Factory gate pricing
FGP - Establishing a price for goods excluding transport costs; i.e. ex-factory.  More...

Facing
The physical (linear) space that one product occupies on a shelf or fixture.

Everyday low price
EDLP - Partner of EDLC - trading strategy which reflects all discounts and/or promotional funding in the ongoing retail selling price.  More...

Electronic point of sale
EPoS - Data recorded at point of sale (check out) from bar-code information.

Everyday low cost
EDLC - A trading strategy which reflects all discounts and/or promotional funding in the ongoing cost of products to the retailer.

Electronic data interchange
EDI - The exchange of documents in a structured form between computers via telephone lines. Used most commonly for purchasing and distribution - orders, confirmations, shipping papers and invoices.

Efficient consumer response
ECR - An approach to supply chain management in which the supply chain is streamlined to react to consumers` actions while using resources efficiently.  www.igd.com/ecr

Distribution
Logistics - The physical movement of product from one place to another.

Direct delivery
Delivery method straight from supplier to retail store, bypassing regional distribution centres.

Demographic data
Information which breaks down the population structure in terms of age, income, household size etc.

Cost Price
Price at which the supplier sells a product to the customer. Price may or may not include VAT or other taxes (e.g. duty), all of which must be stated.

Delivered Wholesaler
Wholesalers who deliver to the customers` premises (as opposed to ‘cash-and-carry` where the customer picks up from the wholesaler).

Convenience store
A store with a sales area of less than 3,000 sq ft (280 sq m), open for long hours and selling products from at least 8 different grocery categories.  More...

Consumer purchase decision tree
Purchase decision hierarchy - Order of priority in which consumers make their purchase decisions. Can be influenced by a large variety of factors (e.g. price, brand, quality etc).

Consumer loyalty
Loyalty - Consumer`s allegiance to a product, brand, store or image.  More...

Consolidation centre
Primary consolidation centre - Regional small scale stocking points used by some retailers to consolidate loads from large numbers of smaller suppliers. Retailers deliver full lorry loads from consolidation centres to RDCs.

Consolidation
The concentration of market share in the hands of fewer, larger operators. This may be in terms of either portfolio share or share of expenditure (or, usually, both).

Code of practice
OFT code - Code existing to govern relations between major supermarkets and their suppliers and put these relations on a clearer and more predictable basis.

Category management
Strategic management of product groups, through trade partnerships, which aims to maximize sales and profits by satisfying consumer needs.  More...

Case size
Outer case - The number of individual products in an outer case.

Category
A group of products that satisfy a consumer need (e.g fresh produce)

Buy one get one free
BOGOF - A type of special offer, where purchase of one product means another is thrown in free.

Business-to-consumer
B2C - As above, but the flow of information is between a business and the end consumer.

Business-to-business
B2B - Flow of information from one business to another. This can cover a range of activities, such as marketing and conducting market research.

BRC food technical standard
BRC = British Retail Consortium - A standard covering all areas of product safety and legality. Suppliers are audited and certified to the standard by an approved certification body. www.brc.org.uk/Certification.asp

Bootlegging
Buying goods such as tobacco or alcohol overseas and bringing them into the UK for the purposes of selling them on without paying the necessary taxes. Bootleg imports differ from lawful “personal� imports that they are intended for resale, usually on an informal basis although occasionally through normal retail outlets.

Bar code
Product code - The code, represented by numbers and bars, used on packaging to enable a product, or outer case, to be ‘scanned`. Bar codes operate to internationally agreed standards. Further information available from GS1: www.gs1uk.biz

Backhauling
In its simplest form, the collection of goods from local suppliers using vehicles returning from store deliveries. Operated by all UK food retailers to reduce costs and aid efficiency.

Agent
Usually a large supplier acting on behalf of a retailer to Consolidator organise the supply of products in a specific category. Smaller suppliers may be expected to trade directly with the agent rather than the retailer.

Advanced shipping notification
ASN - Electronic delivery note sent by the supplier in advance of the arrival of goods at the customer`s premises.