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Does one supermarket earn its space?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

An illustrative supermarket in Spain has 1,500 square metres of selling space and sells EUR 6,000 per square metre per year. Its gross margin is 26 percent. Shrink is 1.5 percent of sales. Staff cost 10 percent of sales, rent is EUR 450 thousand a year, and other store costs are EUR 300 thousand. What is the store contribution (profit before head office costs), and what happens if shrink rises to 2.5 percent of sales?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Store contribution = gross profit minus shrink minus staff minus rent minus other store costs
- Sales = selling area x sales per square metre
- Gross profit = sales x gross margin
- Store costs: shrink and staff move with sales; rent and other costs are mostly fixed

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Sales
What a strong candidate does: 1,500 square metres times EUR 6,000, shown in EUR thousands.
Sales (EUR thousands): 1,500 × 6,000 ÷ 1,000 = 9,000
Step 2: Gross profit
What a strong candidate does: 26 percent of sales.
Gross profit (EUR thousands): 9,000 × 0.26 = 2,340
Step 3: Shrink
What a strong candidate does: 1.5 percent of sales is lost to theft, damage, and waste.
Shrink (EUR thousands): 9,000 × 0.015 = 135
Step 4: Staff
What a strong candidate does: 10 percent of sales.
Staff cost (EUR thousands): 9,000 × 0.1 = 900
Step 5: Store contribution
What a strong candidate does: Gross profit minus shrink, staff, rent, and other costs.
Store contribution (EUR thousands): 2,340 - 135 - 900 - 450 - 300 = 555
Step 6: Contribution margin
What a strong candidate does: Store contribution as a share of sales.
Store contribution margin (percent): 555 ÷ 9,000 × 100 = 6.17
Step 7: Shrink rises to 2.5 percent
What a strong candidate does: Shrink becomes 225 instead of 135, so contribution falls by 90.
New store contribution (EUR thousands): 2,340 - 9,000 × 0.025 - 900 - 450 - 300 = 465
Step 8: Size of the fall
What a strong candidate does: The fall as a share of the old contribution.
Fall in store contribution (percent): (555 - 465) ÷ 555 × 100 = 16.22
Step 9: Sales needed to make it back
What a strong candidate does: At a 26 percent gross margin, each euro of extra sales adds 26 cents of gross profit.
Extra sales needed (EUR thousands): 90 ÷ 0.26 = 346

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The chain should keep the store but make shrink a priority, because it earns EUR 555 thousand, about 6 percent of sales, and one more point of shrink would cut that by about 16 percent, to EUR 465 thousand. This means the store would need about EUR 346 thousand of extra sales just to stand still. The reason is that shrink comes straight off profit, while extra sales earn only a 26 percent margin. The risk is that shrink figures are estimates, since stolen goods are only found at stock counts. As a next step, count stock more often in the categories with the most theft and waste.

Risks a strong answer names: Rent and other store costs are treated as fixed; in practice energy and cleaning move a little with sales; Shrink numbers are estimates, because stolen goods are only found at stock counts.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.