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  A well-known UK Department store invited Cameron to advise. The store had a significant “delicatessen” department, selling cheeses, bacon, pies, sausages etc. There was disagreement at Board Level about whether the department should be shut down. One group believed the department was losing money, and should be removed from their stores. The other group believed it drew extra customers into the store, and justified itself on this basis. Cameron was invited to resolve this dispute.

We first analysed Direct Product Profitability, using our Cogent methodology. This showed the delicatessen counter was making losses – more than 2% of sales value. Next, via customer interviews, and our own systems, we measured Indirect Product Profitability. This demonstrated that the delicatessen did indeed draw in customers – and the indirect added value exceeded direct losses by 0.5% of (delicatessen) sales value. Both sets of directors were correct.

Cameron’s Cogent methodology allows us to look in depth at not just product group profitability, but at profitability of individual product lines – of which there were 198 in the delicatessen. Analysis at this level pinpointed 50 product lines, generating over $500,000 profit in a group of pilot stores, and 148 making over $1m of losses. Crucially, the entire IPP benefit of drawing customers into the store – over $750,000 in the pilot stores - was created by lines within the group of 50.

The store chain restructured its delicatessens around the profitable 50 products, with dramatic improvement in profitability, confident that the drawing power of these products would not be damaged by this action.

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