Retail and consumer goods
MRP (maximum retail price, India)
The highest price, including all taxes, at which a packaged product can legally be sold in India.
Last reviewedWhat does MRP (maximum retail price, India) mean?
In India, the Legal Metrology (Packaged Commodities) Rules, 2011 require most packaged goods to print a maximum retail price (MRP), inclusive of all taxes. Retailers may sell below the MRP but not above it. Brands set the MRP, and distributors and retailers earn their margins out of it. Example: a packaged product taxed at 18 percent GST has an MRP of 100, so its price before tax is about 84.75 (GST rates differ by product, so check the current rate). If the retailer earns a margin of 12 percent of MRP and the distributor 5 percent, the brand sells to the distributor at about 83 including tax.
Example
Because the MRP is printed on the pack, price rises are very visible to shoppers, so brands often shrink the pack instead, for example fewer grams at the same price.
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Related terms
- VAT and GSTSales taxes collected by businesses for the government.
- General tradeSmall independent shops, such as kiranas in India, reached through distributors.
- Modern tradeOrganized retail chains such as supermarkets, hypermarkets and e-commerce.
- Gross-to-netThe gap between list price and the net price a company actually keeps.
- 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.