Valuation: Revaluation at Retail (Retail Method)
Use
If you change the retail price of an article and the stock is managed at retail, stock has to be revaluated at retail so that Inventory Management is exact. If you do not revaluate the stock, the margin between cost and retail would no longer be accurate and this would lead to goods movements for stock managed on a value-only article basis being valuated incorrectly. A retail revaluation document is updated whenever inventory is revaluated at retail.
A fixed-amount or percentage reduction in the retail price is referred to as a markdown. A fixed-amount or percentage increase in the retail price is referred to as a markup. The markup or markdown multiplied by the quantity to which the price change applies is referred to as the markdown/markup volume.
With the retail inventory method, markups and markdowns are aggregated in the retail stock ledger. In the case of markdowns, sales are updated at the reduced price. To determine the closing stock at retail, the system adds the aggregated markdowns to the sales.
Features
Reasons for Making Price Changes
Price changes can be necessary as a result of a change in the factors making up the retail price. The new retail price is entered in the conditions in the central SAP system. The new retail price applies to the total inventory on-hand in the site.
Price changes can also be made locally. This is the case when the price changes on-site in a store but is not changed in the conditions in the central SAP system. As a result, the price charged at the point of sale is not identical with that in the SAP system. The new retail price may only apply to a part of the stock.
You can maintain reasons for retail price changes in Customizing. You must enter a reason for a retail price change every time you revaluate stock of an article. This enables you to analyze markdowns based on reasons and adjust your assortment, pricing or purchasing policies to suit.
Revaluation Data Updates
When you make a price change, the stock of the article is valuated in SAP Retail at the new price. You do not have to update price changes in a separate step.
Every revaluation at retail is passed on to the Retail Information System (RIS) and can be analyzed there in information structures. You can use the information structures to evaluate markdowns, for example, using selected criteria.