The cost of retailing milk in Knoxville, Tennessee

The objective of this study was to estimate the costs of retailing milk in Knoxville, Tennessee, in a convenient store and in a supermarket during August 1978.

The procedure employed was the economic-engineering method of analysis. The costs of retailing milk in each store were broken into five cost elements: the land and building cost element; the refrigeration equipment cost element; the utility cost element; the direct milk labor cost element; and the store services cost element.

The total annual cost of retailing milk in the representative Knoxville supermarket equaled $22,127.83 and $9,063.11 in the representative convenient store. The per quart equivalent cost of retailing milk equaled 4.041 cents in the supermarket and 8.286 cents in the convenient store.

Per quart equivalent milk retailing costs were also determined for each of the cost elements in the two stores. The supermarket had lower per quart equivalent milk retailing costs for all cost elements except for the direct milk labor cost element. The store services cost element in both stores had higher per quart equivalent milk retailing cost than any of the other cost elements. The per quart equivalent milk retailing cost for the store services cost element in the super market equaled 2.417 cents while in the convenient store it equaled 5.501 cents.