Apr 24, 2018 18:46
6 yrs ago
2 viewers *
English term

smooth the sales over the cycle

English Other Economics
The reason for Falabella’s resilience is its assortment of businesses, spread judiciously across six countries. Besides its 101 department stores, it runs 102 supermarkets; together these generate about half of the group’s retail revenues. The other half comes from 246 big-box DIY shops (the result of a merger with Sodimac, another Chilean firm, in 2003). The fortunes of the three do not overlap exactly, helping to smooth sales over the cycle.

what do you understand by "smooth the sales over the cycle"?
Many thanks in advance.

Discussion

Lev Semenov Apr 25, 2018:
Sorry, misprint. I mean FRASING
Lev Semenov Apr 25, 2018:
I agree, actually fluctuations depend on different factors. But our framing is "... over the cycle". Suppose, it means the year cycle
Daryo Apr 25, 2018:
Whatever is the source of fluctuations the idea of "smoothing" the total sales is that variations are not synchronised so the total tends to vary not so much.
Terry Richards Apr 25, 2018:
@Tony I agree with what you say but I think the emphasis is on peaks and recessions here rather than seasonal variations.

DIY does well in recessions because people will tend to fix it themselves rather than hire a professional. Department stores don't do as well because their demand is highly variable - more at the luxury end of the market. Supermarkets just keep going pretty much regardless of the current economic conditions - people still have to eat!
Tony M Apr 24, 2018:
@ Asker I am in no way an expert in this specific field, but the term 'smooth' is used in an ostensibly similar way in many other fields.
I would understand this as meaning that this diversity in the business means that sales peaks and troughs are evened out across different sectors; as a simplistic example, even though sales of electric heaters will probably drop off in the Summer, this will be made up by increased sales of garden furniture!

Responses

+2
57 mins
Selected

The three systems have different periods of peaks and recessions, that alignes total revenue

++
Peer comment(s):

agree Terry Richards
11 hrs
Thank You, Terry!
agree Tina Vonhof (X) : I agree that it most likely is looking at the long term, not over any fixed period.
20 hrs
Thank you, Tina!
neutral Daryo : "recessions" refers to a different kind of cycle - over quite a number of years // this ST is simply about seasonal variations over one year.
21 hrs
Thank you for the note, Daryo. But mostvusual recession period is half a year, though it varies, as Tina mentioned.
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4 KudoZ points awarded for this answer. Comment: "Many thanks!"
48 mins

even out sales during a particular period

As Tony says, it means reduce the peaks and troughs.
The cycle is the business cycle, which usually (but not always) means the year.
Peer comment(s):

neutral Terry Richards : I think the emphasis is more on the "boom and bust" cycle here.
11 hrs
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