Excerpts from the report; The breakage and damage of grocery products in warehousing, delivery, and store handling operations result in an estimated annual cost of over $35 million. Breakage and damage are reflected in lost sales, increased labor cost, and higher gross margin or lower net profit. The objective of this research was to determine the causes and the extent of breakage and damage to dry groceries in warehouses and retail food stores. The report shows the causes of damage and offers suggestions for eliminating them. The suggestions are presented in general terms because the time and costs involved in changing equipment or practices and measuring the effect of each specific suggestion were beyond the resources available for the study. This report also measures the direct and indirect costs of damage occurring in grocery warehouses, in transit, and at the retail store.