Same Store Sales
Updated on March 3, 2023
It is a retail industry metric used to define the performance of a single store in a given period of time when compared with the same period of previous year. This helps in gauging the revenues and sales of a particular store during two similar periods or quarters. Hence, historical performance can be evaluated using this parameter against current performance. It is critical for businesses and becomes an important parameter for management for making projections for future.
Why is Same Store Sales metric used?
Same Store Sales is quite important from certain aspects, for management as well as other stakeholders :
a. It is a good tool for judging the current performance and estimating future growth/sales
b. It helps in effectively measuring the change in number of customers, impact of change in prices or new product launch
c. It also helps in measuring the performance of new stores versus existing and also in checking area wise growth as per store location
How is Same Store Sales metric calculated?
Same Store Sales = (Current Period Sales/ Previous Period Sales) – 1