Why is it important for department stores to achieve a high gross margin?
A) Their operating expenses are higher than other retail formats.
B) It is stated in the store's financial objectives.
C) Without a high gross margin, department stores will be unable to achieve a high asset turnover.
D) The strategic profit model will otherwise change the strategy of the retailer.
E) A low gross margin will turn it into a discounter.

Question

Quizplus · Accepted Answer

It is important for department stores to achieve a relatively high gross margin because their operating expenses tend to be higher than those of other retail formats like discount stores. Operating expenses are costs, other than the cost of merchandise, incurred in the normal course of doing business, such as salaries for sales associates and managers, advertising, utilities, office supplies, and rent.

Why Is It Important for Department Stores to Achieve a High