Profit margins for grocery retailers were low, typically 1-3% of gross sales before tax. With
low unit prices and high volumes, store operating profits were highly dependent on providing
efficient operations. Total sales volume per store and per square foot of retail space were critical
factors influencing retailer profitability. Since advertising was a significant cost for most retailers,
regional market share was a critical factor influencing retailer profitability by leveraging the
fixed costs of regional (e.g., newspaper) advertising.