Sales KPIs In Retail Part 1

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Sales KPIs are the most commonly used in retail. First of all, we will look at sales vs. last year, sales vs. plan and same store sales. These are used in almost every retailer.


Sales vs. Last Year

The first KPI any retailer looks at is sales vs. last year. This shows the performance of sales this year against sales for the same period last year. This is normally given as a percentage increase/decrease and /or a monetary value.

Sales vs. Last Year is calculated as:  

((This Year's Sales -  Last Year's Sales) / Last Year's Sales) X 100

These figures are often compiled by day, week, month or period, quarter, season and year.  

Retailers are always looking for growth from one year to the next. Every retailer wants to increase its market share by providing what customers want - and what its competitors don't offer. This could be a more fashionable or wider assortment, superior quality or just a better price.


Sales vs. Plan

Sales vs. plan is calculated as: 

((Actual Sales - Plan Sales) / Plan Sales) X 100

These figures are compiled by day, week, month, quarter, season and year.  Ratios such as sales vs. plan help the retailer in developing, implementing and monitoring its strategic plans. A retailer normally establishes its plans based on historical performance. They also take into account strategy changes and expected structural and economic changes. An example of structural change is opening new stores and an example of economic change is inflation.

Some plans may be set deliberately high to encourage people. However, plans need to be realistic and reachable to be useful in calculating performance.

Measuring sales vs. plan will aid management in spotting trends and will encourage positive decision making. Falling sales that are not corrected by promotional markdowns, may make a company begin reducing expenses to maintain profitability.

Sales above plan in a department may point to a consumer trend that could be capitalized on by extending the depth of the assortment.

Unplanned events, for example, a store fire, will not be reflected in the original plan and a new forecast may need to be calculated.


Same Store Sales

Also known as comp store sales, comparable sales, or Like-for-like sales, it is a ratio that represents the total sales increase or decrease, compared to the previous year, for identical stores.

Same Store sales measures only those stores fully open throughout the present and previous years. 

When looking at a same store sales figure, it is important to know the current level of inflation. If inflation is 3%, like-for-like sales of plus 2% means that unit volume is actually dropping. If inflation is 1%, like-for-like sales of plus 2% means that unit volume is growing by 1%.

What does same store sales mean in a multi-channel world? If you treat the online channel as “store 999”, for example, this store will show high growth while physical stores will show lower growth or even declines. However, some of the online growth will come from existing customers buying in this channel and some will come from new customers who shop in your online channel and may never have shopped in your stores. However, they are not like-for-like. Some of the store decline or reduced growth will be because of cannibalization between channels.

If you have a CRM implementation, you could go some way to addressing this by measuring same customer sales, i.e. the sales growth year on year from consumers that shopped with you in any channel in both of the last two years.


Next time we will look at sales per square foot or metre, sales per linear foot or metre and sell through percent.

If you’d like to know more about these KPIs and how to calculate and interpret them check out our Analyzing Retail KPIs e-learning course.

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Posted by Brian Hume
20th September 2018

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