80 Retail Terminologies – Every Retailer Should Know!

80 Retail Terminologies – Every Retailer Should Know!

Retail Terminology DefinedUnderstanding Retail Terminology – Retail Dictionary 


The frequently used terms and jargons in the retail stores are known as retail terminologies. These are the terms which every retailer should be familiar with, to make the business operations smooth and effective. Thus, it becomes like a common language which is understood by everyone in the retail industry Every industry has its own set of terminologies which are used by them within their business environment.

  1. Hypermarket

Hypermarket is a retail facility that combines superstore and department store and carries a huge range of merchandise from groceries to appliances and clothing thus fulfilling all needs of the customers under one roof. Hypermarkets are based on high volume, low margin formula. They have a huge footfall and covers a sales floor area between 5000 to 15000 square meters. Usually, they are located just out of city/town or in suburban areas.

In 1963, the retail giant Carrefour opened the first hypermarket in St. Genevieve-de-Bois near Paris, France.

  1. Supermarket

A supermarket is a bigger version of a grocery store in brick and mortar format generally, a self-service shop/store offering a wide range of food, beverage, household products on display that are categorized into different sections such as Grocery, fresh food, home hygiene & beauty and further divided into various sub-sections. However, the range of merchandise is limited as compared to a Hypermarket or big-box market.


Every Retail store model is built on the below layout.

  1. Goods Receiving Area/Department
  2. Warehouse
  3. Sales Floor
  4. Check-Out


Retail Terms used in Goods Receiving Area/Department and Warehouse.


  1. Receiver/Receiving Assistant

A receiver is a person who is responsible for receiving goods and products from a supplier and verifies the quantity/purchase cost against a purchase order and make sure the products are in good shape and condition. He follows the receiving SOP’s and guidelines.

  1. PDT/LDT

PDT/LDT  is a multi-purpose device known as portable data terminal/Laser data terminal, used for receiving products by scanning item barcode, generates price labels and used for several other receiving functions.

LDT’s are more efficient, time-saving and multi-functional as compared to PDT’s.


  1. Hand Pallet Jack

Hand Pallet Jacks are manually operated hydraulic jacks used for moving pallets within the receiving and warehouse area. They are also known as a pump truck, pallet pump, a pallet truck, dog, or jigger.


  1. Pallets:

It is a flat wooden or metal structure that is used for storing goods in retail warehouses. They come in various standard sizes such as 48’’ X 40” referred to as GMA (Grocery Manufacturer Association) commonly used pallets. The other two sizes are 42” X 42” and 48” X48”.


  1. Weighing Scale

A device used by receivers to measure the weight of the goods that are received by weight of the items generally fruits, vegetables, meat, and other products. The fresh food departments have price computing scales to put price stickers on the weighted merchandise bought by the customers.


  1. Temperature Gun/Infrared thermometer

Infrared thermometers are used in verifying and checking the temperature of frozen or chilled products by receivers in Supermarkets.


  1. LPO

A local purchase order is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services. It is used to control the purchasing of products and services from external suppliers


  1. Order Lead Time

A time gap between the initiation of the order placement and the delivery of the ordered item. The ideal lead time is considered 3-4 days in superstores.


  1. EAN

The European Article Number (EAN) is a barcode standard, a 12- or 13-digit product identification code extensively used in the retail business for the inventory management system.


  1. Barcode

Barcode is defined as a machine-readable code in the form of numbers and a pattern of parallel lines of varying widths, printed on a commodity and used especially for stock control.


  1. Stacker

A powered machine used in warehouses to transport and stack pallets into the racks and to load or unload the pallets from vehicles.


  1. Forklift

A powered machine used in large warehouses to transport and stack pallets and materials. A driving license is required to operate this vehicle, unlike the stacker.


  1. Sales Floor/ Selling Area

Sales Floor or Selling Area where products and services are put on display segregated by sections and departments in a supermarket. Here customers make the purchase and moves to the checkouts for payment.


  1. Inventory

Inventory or stock is the products and items that any retail market/business holds and are kept in shelf display or warehouse for the purpose of sales, trading or holding.


  1. Inventory counting/Stocktake

It is the process of physically counting the inventory(items/goods/products) thus verifying the quantities with the actual data to find out the variances in the available stock on papers.


  1. Dead Stock

Deadstock is the merchandise/product that was never sold or purchased by the customers. Finally, it is being removed from the shelves usually, because it is not the choice of your customers anymore or outdated.


  1. SKU – Stock Keeping Unit

SKU is the unique numerical code that is used for scanning and tracking the inventory. The SKU is often used to identify the product, product type, size or the manufacturer.


  1. PLU – Price Lookup Code

Price look-up codes are a system of numbers that identify the price of the product that is generally weighed or counted in retail supermarkets. PLU is key to maintain the inventory records of the fresh produce. It is generally used in Fresh Food Departments of Retail stores and could be assigned internally or externally.


  1. Inventory Shrinkage

Shrinkage is the variance between goods received and goods sold. The reasons for shrinkage could be due to clerical errors, shoplifting, internal thefts, damaged, incorrect counting, wastage not recorded or use of incorrect units of measure.


  1. Loss Leader

A loss leader is a product that is intentionally sold at a price below its market cost. A loss leader is a pricing strategy to attract customers to retail stores. Loss leader products don’t give profit instead they generate sales volume and brand awareness. Also, it stimulates the sales of other profitable products.


  1. Slow Movers

Slow movers are the products with low turnover over a specific period of time. Most retailers consider 3 months trial to measure the performance of the product before declaring them slow movers and finally removing them from the shelf.


  1. Facing

Facing is straightening and pulling forward of products /merchandise on the shelf so that name of the item printed on the product is visible. The facing also describes the space allocated to a particular product on the shelf. Overall, facing is key in keeping the displays presentable and keeps the planogram maintained.



  1. Merchandising

Merchandising refers to a range of product assortment available for sale and displays also the products are showcased in such a way that it stimulates customers to make a purchase. It helps to make stores organized, presentable and products are aligned to their respective categories. Merchandising is not only limited to making beautiful displays moreover it acts as a tool for in-store marketing of the products.


  1. Cross Merchandising

Cross merchandising is displaying complementary or unrelated products together to drive sales. It enhances the shopping experience and makes shopping more convenient. For Example, displaying of salad dressings next to cut salad counter or display of ice cream scoops next to ice cream display in the frozen section


  1. Planogram

Planogram is the retail space planning for your merchandise and allocating the right space for the products leading to increased customer purchase. Every brand has its own defined planograms which keep changing over a period of time. (planogram management)


  1. KVI– Key Value Items

Key-value Items are the important business drivers of any retail outlet. KVI are the products with high sales volume and are frequently consumed by the customers. KVI’s are strategically priced and merchandised.


  1. KVC – Key-Value Categories

Key-value categories are the most attractive categories with high sales turnover. KVC’s are also differently priced like KVI’s and strategically located in the store. KVC’s categories differ from store to store as per location and customer demographics. However, certain key-value categories may remain same like Confectionary and snacks in the grocery. Cleaning and Paper category in home hygiene.


  1. FIFO – First In First Out

FIFO is a retail practice where retailers try to sell the old inventory first by pulling old items to the front of the display shelves according to the best before the date of the product. Retailers practice FIFO to control and minimize wastage and avoid product expiry issues. 



  1. Average Basket Value

The average basket value defines the purchasing capacity of the customers shopping from a particular store. It could be calculated daily, monthly or annually. The average basket value is calculated when total sales are divided by the number of customers. However, purchase returns on the same day or a later date are adjusted accordingly.


  1. EDLP – Everyday Low Pricing

EDLP, which stands for Every day Low Prices, is a Pricing strategy in which firms promise consumers consistently low prices on products without having to wait for promotional sale or sale events. Here retailers tend to communicate to customers that they are providing low prices without having them to wait for occasional sales events.

In the EDLP pricing strategy, a firm sets a low price and maintains them over a long-time horizon. Big retailers like Walmart Inc., Food Loin and Gordmans has gained significant success due to its EDLP pricing strategy.


  1. Flash Sales

Flash Sale is a discount or short period promotions that could last for some hours or a day. Retailers generally offer high discounts on certain items for a limited time period. The inventory is generally limited with high discounts leading to huge customer traffic.


  1. Impulse purchase

Products that stimulate customers to make an unplanned purchase, Impulse purchase is a result of effective merchandising, eye-catchy promotional messages and display methods usually implemented at checkouts. For example, a shopper in a supermarket might not specifically be shopping for confectionary. However, candy, gums, mints, and chocolates are prominently displayed at checkout aisles to trigger impulse buyers or kids to buy what they might not have planned or considered either.


  1. Prestige Pricing

A marketing strategy where prices are set higher than normal because lower prices give a perception of low quality to customers. Prestige pricing is usually done in high-end products like perfumes, jewellery, clothing and most of the big brands has been doing it.


  1. Mystery Shoppers

Mystery shopping is a tool to measure the quality of service or compliance with regulations. Thus, a person is employed to visit shops behaving like a normal customer and he assesses the quality of goods and services.


  1. MarkDown

A price markdown is a deliberate reduction in the selling price of the selected merchandise. It is generally done to increase the rate of sales of particular inventory. Markdown pricing strategy is followed to make clearance at the end of the season or to get rid of obsolete merchandise due to its near expiration date or other reasons.


  1. SEL – Shelf Edge Labels

Shelf edge labels also known as price labels or price tickets used in retail stores. SEL is used to display the selling price of the product and slotted in front of the product fixed to the shelf edge. The shelf edge labels may contain other internal information which is solely used by retailers such as Barcode of the product, Supplier information, printing date of the label, brand name and logo, other internal codes customized for store use.


  1. POP- Point of Purchase

Point of purchase is placing or merchandising of the products cleverly at eye level shelves which catches the immediate attention of the customer. The POP is the most convenient shelf normally the third or fourth shelf from the floor. Customers have to make fewer physical efforts in product selection.


  1. POS – Point of Sale

Point of Sale is the place where customers head to make payment (Checkout) for their purchase after they have selected the products or services.


  1. Assortment Planning

A selection of product, ordering and placing the product in the correct categories. Thus, it is the identification of the products that need to be merchandised in the store. Assortment Planning helps to acquire the right products as per your customer niche.


  1. Clearance Sale

A discount on the sales price of the item to reduce or to zero the inventory. This is generally practiced if a product is not selling well, it may be a seasonal product or there can be any other reason to zero the inventory.


  1. Checkouts / Cash Tills / Point of Sale

This is the last and most important area of the store. This is where shoppers head to when they are ready to pay for their items.

POS (Point of Sale) system is set up here.

Most Checkouts have shelves containing merchandise that shoppers can pick up on their way out. (Chewing gum, Chocolates, etc.)


  1. Gross Margin

The difference between the cost price and the sales price is called Gross Margin.

The Formula for Gross Margin Is

Gross Margin = Net Sales − Cost Price

  1. Gross Margin Percent

The gross margin percent is calculated as follows:

Gross Margin Percent = (Sales – Cost)/ Sales X 100


  1. Inventory Turnover

The number of times during a given period that the average inventory on hand is sold and replaced. The inventory turnover is calculated periodically as per the company policies.

Inventory Turnover = Cost Price of the Products sold / Average Inventory

  1. Kiosk

It refers to a small stand-alone structure. This could be either a computer or display screen used to disseminate information to customers, or a free-standing, full-service retail location (e.g. Jewellery kiosk)


  1. Product Life Cycle

This term is used to describe the series of stages that each commercial product goes through when it hits the market.

These stages include an introduction, growth in sales revenue, maturity and decline. Retailers must pay attention to the life cycle of each of the products.


  1. Private Label

Products that are exclusively manufactured under the name of the company or the retailer. Retailers focus more on private labels to get better margin and profit as compared to other brands sold by retailers.


  1. Promotions

Attempts to increase the sales of any particular products

Different types of promotions are: –

  1. Threshold Promotion

Provide X% discount on the purchase of items having cost greater than AED XX.XX


  1. Multi-Buy Promotion

Buy 2 Get 1Free

  1. Mix and Match Promotion

A small value product free on purchase of a big value product.

  1. Simple Promotion

Festive Offers


  1. Replenishment

Process of filling up the stocks whenever the inventory goes below the minimum level, in order to avoid stock out


  1. Value Received Note (VRN)

The final quantity of stock that we have received against the LPO. Thus, it is the confirmation of the actual quantity of goods received by the receiving department.



  1. Price Change

The process where the product prices are changed based on various factors. The reasons for price change could be a change in purchase or cost price, wrong price or margin or end of promotions.


  1. Reorder Form

It contains all the details of the supplier’s listed items with description, barcode, selling price, cost price and total sales for a week or certain no of days for any number of months that have been decided as the guidelines for the document.


  1. Shelf and Arms

Shelf- A fixture unit where stocks are displayed for the sales.

Arms – These are the support of the shelves, shelves are resting or kept on the arms.



  1. Display Bins

The fixture used to display the products in the selling area (promotional / Non-Promotional).

It is used for non-breakable products.


  1. Chillers

It is a machine for cooling perishable products, especially a cold cabinet or refrigerator for keeping and storing food products a few degrees above the freezing point (0 – 5 degrees).


  1. Freezer

It is a machine for storing food products with a temperature of -18 degrees. Generally, it is used for ice creams and other frozen products to maintain the quality of the products and to resist the growth of harmful bacteria and fungus.


  1. Leaflet

A booklet of promotional advertisement informing of the special offers on products sold in the store.


  1. Barcode Scanner

It is a small scanner placed in the store which can scan the barcode of any product and display the description and price of the product. It is helpful when there are missing price labels or just displayed products having no price labels fixed.


  1. Red Barcode Sticker

Used for near expiry items or slow-moving items that need to be cleared quickly.


  1. Shelf Label Holder

Transparent plastic holders used to hold or fix shelf edge labels/price tickets/price stickers or price labels.


  1. Hooks

Used to hang items which cannot be displayed otherwise. The hooks help in merchandising the items which cannot be displayed on the shelves.  E.g. Toothbrush, hair accessories, etc.


  1. Iron Bars

Used at the backside of the elements to hold all the hooks. They can be pegboards on back panels.


  1. Dividers

It is a separator between two different products kept on the same shelf. Dividers help in easing out the displays.


  1. Pushers

Used to bring the back products to the front automatically once the front product is being picked.


  1. Posters

Used to inform the customers about the product (name and description), price and any other details that are necessary.

Can also be used to promote services or message.


  1. Triangles

It is used to display product information and price. It is usually handwritten.


  1. Flip Chart

It is a big display hanging from the ceiling which contains product name and price details.


  1. Front Risers

It is a front guard at the front of the shelf used to stop smaller items from falling off.


  1. Negative Stock

The item which is selling without reception, it is known as negative stock. This can be due to wrong receiving or any other barcode issue such as some items might have been sold on different barcodes than on its original barcode.


  1. Negative Margin

When an item sells below cost price, it creates a negative margin for the company. This is a direct loss to the company.


  1. Expiry

Mentioned on the product, it is the date after which the product will become unfit for consumption. Expired products must not be allowed on the shop floor as it is illegal to sell them.


  1. Short Expiry

Items about to expire in the next few days. They are either returned to the suppliers or prices reduced for quick sales. However, these products should be removed from the shelf a few days prior to their expiration date.


  1. FSU (Floor Stock Unit)

It is a unit where additional products are exhibited. This is done either for the promotion of a product or brand building. It is usually a secondary merchandising for a product.


  1. Signage

It is any kind of visual graphics created to display information to a particular audience.


  1. Side Kick / Side Stand

It is a stand which is fixed to the Gondola head. This helps to cross-sell and cross merchandise the products or to provide space for additional lines of products added to the assortment.


  1. Manual In, Manual Out (MIMO)

It is a practice where retailers adjust the stock or make corrections in the stock books when certain Items are received on one barcode and are sold on different barcodes.


79. Clienteling

A technique used by retail associates to better enhance their relationship with each customer. Clienteling involves relationship-building activities such as using CRM software to collect and track customer data, providing personalized shopping experiences, and following up with shoppers in a relevant and timely way.


80. LIFO (last in first out)

This is a principle that assumes new merchandise sells before older stock. It matches current sales with the current cost structure.


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