Retail, Metrics, Rajnish,performance measurement, rajnish kumar itc

2,541 views

Published on

Retail Metrics Rajnish

Published in: Business, Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,541
On SlideShare
0
From Embeds
0
Number of Embeds
9
Actions
Shares
0
Downloads
154
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Retail, Metrics, Rajnish,performance measurement, rajnish kumar itc

  1. 1. Retail Metrics
  2. 2. Measuring Retail performance- An overview
  3. 3. Taking Stock : what the Analysts want to see 1.Change in Total Sales % 2.Comps : Change in Comparable Store Sales % 3.Earns – Gross Margin % 4.Turns – Inventory Turnover 5.GMROI – Gross Margin Return on Investment 6.RONW – return on Net Worth 7.Sales Per Square Feet
  4. 4. Change in Total Sales % <ul><li>Reported Monthly Quarterly and Annually </li></ul><ul><li>A retailer with strong sales growth is presumed to have a strong retailing concept at least one that matches with the current mood of the customer and economy </li></ul><ul><li>Issues </li></ul><ul><li>Inflation in economy can have an effect on overall sales number </li></ul><ul><li>New Store openings- Share in the total sales </li></ul>
  5. 5. Comparable Store Sales (Comps) <ul><li>Sales Growth % for only the stores open Throughout the reporting period – eliminating new stores </li></ul><ul><li>Compare to direct competition </li></ul><ul><li>Compare to Sector </li></ul><ul><li>Reflects consumer preference over cart competitors </li></ul><ul><li>Reflects increase Share of the Wallet </li></ul>
  6. 6. Gross Margin % <ul><li>Gross Margin % = { 1-(COGS/Net Sales)} </li></ul><ul><li>COGS – cost of goods sold </li></ul><ul><li>Gross Margin Must Cover : </li></ul><ul><li>Cost Of Capital </li></ul><ul><li>Cost of Storage </li></ul><ul><li>Cost of Obsolescence </li></ul><ul><li>Ranges from 15 % to 100 % depending on category </li></ul><ul><li>A one point increase in SG& A(Selling,General and Administrative Expenses) as a percentage of sale is associated with a one point increase in Gross Margin. </li></ul><ul><li>It enables retailers with different gross Margins to achieve similar return on sales average. </li></ul>
  7. 7. Inventory Turns Inventory turns = {Net Sales/Inventory at Retail} Or Inventory Turns = {COGS/Inventory at cost} Both Measures are equivalent Net Sales/Inventory at cost
  8. 8. GMROI <ul><li>Gross Margin return On investment </li></ul><ul><li>Measured as </li></ul><ul><li>= Earns X Turns </li></ul><ul><li>For a retailer or a format to be successful the GMROI should be equal to or greater than 100 </li></ul><ul><li>However this number could change with the context of lower operating costs </li></ul>
  9. 9. Return on Net Worth (RONW) <ul><li>Net profit/net sales X Net Sales/Total Assets X Total Assets/Net worth </li></ul><ul><li>Profit Margin X Assets turnover X Leverage </li></ul><ul><li>Margin x Assets x Finance = High Yield </li></ul>
  10. 10. Return On Space <ul><li>= rupee margin/number of racks units </li></ul><ul><li>Should be measured per month basis Quarterly, Half Yearly and Annually </li></ul><ul><li>1 wall Rack Unit = 1.5 X 1 Floor Rack unit </li></ul>

×