Sales Benchmark Ratios

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Sales Growth

= (Current FY Net Sales – Previous FY Net Sales) ÷ Previous FY Net Sales x 100
What it is
This benchmark measures the change in net sales over a specific period. Although most commonly referenced annually, it can also be tracked on a weekly, monthly, and quarterly basis.
Why it matters
A positive ratio is preferred. Sales should keep up with the rate of inflation, adjusted by changes in the population served, and changes in the profile of the merchandise offering.
Other ratios or actions to consider
A negative result should trigger review of merchandising strategies both on the store and department levels. A variety of factors can influence sales growth, including changes in the competitive environment, marketing, selling prices, customer base, merchandise offered, and inflation.
 
Net Sales as a Percent of Gross Sales
= (Net Sales ÷ Gross Sales) x 100
What it is
This measure reflects the magnitude of merchandise discounts and returns.
Why it matters
Ideally, this benchmark should be 100%, but in reality there will always be a certain amount of discounts and returns. The closer to 100% the better.
Other ratios or actions to consider
A low ratio should prompt a review of markdown strategies, product mix, and reasons for returns.
 
Average Net Sale
= Net Sales ÷ Number of Sales Transactions
What it is
This ratio, also referred to average basket size, is the average dollar amount per transaction.
Why it matters
A high ratio is preferred. Visual merchandising, customer service, and merchandise assortment can increase the average net sale considerably.
Other ratios or actions to consider

A decrease in the average net sale may reflect an absence of high-priced items, or indicate that the store is not meeting customers’ needs. 

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