Shop 'til you(r profits) drop

ProHub Comment

This case demonstrates a structured profitability analysis where the candidate must diagnose flat EBITDA despite revenue growth, identify COGS as the culprit (specifically dry commodities), and then use competitive benchmarking and customer willingness-to-pay data to recommend a private brand migration strategy. The case tests both quantitative analytical skills and qualitative reasoning about supplier power and customer behavior.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Your client, SaveRite, is a large grocery retailer who is under pressure from new leadership to improve historically flat profits within the company. They have come to us to help identify the source of this plateau and develop a plan to increase profitability within the company.

Clarifying Information

  1. Client/Company information: Client operates national grocery chains, with nationwide presence and operating only in physical retail locations.
  2. Industry/Competition information: Growth within industry is positive. Competition not experiencing similar declines in profitability. No new players.
  3. Product information: No information at this time about products driving profitability problem.
  4. Value Chain/Revenue information: Buys food from suppliers, sells to customers.
  5. Timeline: ASAP.