Locking the costs at a fixed amount for a fixed amount of time. This certainty allows retailers to plan promotions, discounts levels, special offers without imp

Locking the costs at a fixed amount for a fixed amount of time. This certainty allows retailers to plan promotions, discounts levels, special offers without impacting profitability. It also simplifies accounting and budgeting. Making a profit from the hedge is not really a priority (it is difficult enough for professional trading firms with full research departments at their disposal). Also, retailers (and other producers, like coffee roasters) MUST buy their raw materials quite regularly, so the profit potential of hedging tends to average out.