Retail and consumer goods
Modern trade
Organized retail chains such as supermarkets, hypermarkets and e-commerce.
Facts checked against sources onWhat does Modern trade mean?
Modern trade means organized retail: supermarket and hypermarket chains, convenience chains, cash-and-carry wholesalers and, in many markets, e-commerce and quick commerce. The term is widely used in India, Southeast Asia, Africa and the Middle East, where it is set against general trade. Modern trade buyers are large and negotiate hard on price, trade spend and shelf space, but they offer scale, data and efficient central delivery. Example: a brand might sell 40 percent of its volume through 20 modern trade customers and the other 60 percent through thousands of small general trade shops.
Where does it come up in case interview prep?
- India for case solversLesson in Regions for case solvers: the big markets of the world
- Southeast Asia for case solversLesson in Regions for case solvers: the big markets of the world
- Channel economics across industries: direct, retail, marketplaces, distributors and sales teamsLesson in Customers and growth: the economics of marketing
- How consumer goods companies make moneyLesson in Consumer packaged goods (FMCG)
- Distribution, promotions, private label, and innovationLesson in Consumer packaged goods (FMCG)
- How the drinks industry works: brands, bottlers and the route to marketLesson in Beverages: soft drinks, water, beer, wine and spirits
Related terms
- General tradeSmall independent shops, such as kiranas in India, reached through distributors.
- Trade spendThe money brands pay retailers and distributors to stock, display and discount their products.
- Private label (own brand)Products sold under the retailer's own brand rather than a manufacturer's.
- Numeric distributionThe share of all relevant stores that stock a product.
- Like-for-like sales (LFL)Sales growth from stores open in both periods, leaving out new and closed stores.
- Sales per square metreStore sales divided by selling space: how productive the space is.
- Shrink (shrinkage)Inventory lost to theft, damage, errors or spoilage.
- MarkdownA lasting price cut to clear stock that is not selling.
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