Retail metrics
glossary.

The number of people who enter your store in a period, usually counted at the door. Also called footfall or visitors.

Example

A counter records 1,240 entries on Saturday.

People who walk past the storefront, whether or not they come in. Landlords and malls often quote this figure.

Example

3,000 people pass the window between 10am and 6pm.

The share of passers-by who walk in. It measures how well the window, signage and entrance pull people inside.

Formula

Visitors ÷ passers-by × 100

Example

240 visitors ÷ 3,000 passers-by = 8%.

How long a visitor stays in the store, from entry to exit. Usually reported as an average or median.

Example

Visitors stay a median of 11 minutes.

The hour of the day with the most visitors. Staffing and breaks are usually planned around it.

Example

Saturday 1–2pm brings 190 of the day’s 1,240 visitors.

A period’s traffic relative to a base period set to 100, used to compare weeks, stores or years on one scale.

Formula

Visitors this period ÷ visitors in base period × 100

Example

5,000 this October vs 5,200 last October = 96.

The share of visitors who leave within a short threshold you choose (for example, under two minutes) without engaging. Definitions vary by vendor, so state the threshold.

Formula

Short visits ÷ visitors × 100

Example

150 of 1,000 visits under 2 minutes = 15%.

The share of visitors who make a purchase. In stores it is transactions divided by visitors, because a receipt can’t be tied to one person.

Formula

Transactions ÷ visitors × 100

Example

40 transactions ÷ 200 visitors = 20%.

Completed sales (receipts) in your POS for the period. Exclude returns, voids and online orders when pairing with door counts.

Example

312 receipts on Friday.

The average amount spent per transaction. Also called average sale, average ticket or average basket value.

Formula

Net sales ÷ transactions

Example

$15,600 ÷ 312 = $50.

The average number of items in each sale. Rises with add-ons, bundles and good service.

Formula

Units sold ÷ transactions

Example

780 units ÷ 312 transactions = 2.5.

The average selling price per unit sold, after discounts. ATV = UPT × AUR.

Formula

Net sales ÷ units sold

Example

$15,600 ÷ 780 units = $20.

Revenue divided by everyone who walked in, buyers or not. It combines conversion and ATV into one number.

Formula

Net sales ÷ visitors, or conversion × ATV

Example

20% × $50 = $10 per visitor.

Gross sales minus returns, discounts and allowances, excluding sales tax. The base for most ratios here.

Formula

Gross sales − returns − discounts

Example

$52,000 − $1,500 − $2,500 = $48,000.

Sales growth counting only stores open in both periods, so openings and closures don’t distort it. Also called same-store or comparable sales.

Formula

(Sales now − sales before) ÷ sales before × 100, same stores only

Example

$520,000 vs $500,000 = +4%.

Annual net sales divided by selling area. Measures how productive your floor space is.

Formula

Annual net sales ÷ selling square feet

Example

$520,000 ÷ 2,400 sq ft = $217.

An estimate of future sales, often built from expected traffic × conversion × ATV for each period, adjusted for seasonality.

Formula

Visitors × conversion × ATV

Example

6,000 × 20% × $50 = $60,000 for the month.

A period’s sales relative to the average period, where 1.0 is average. Used to shape a forecast.

Formula

Period sales ÷ average period sales

Example

December $90,000 ÷ $60,000 average = 1.5.

Net sales divided by staff hours worked. A core measure of labor productivity.

Formula

Net sales ÷ staff hours

Example

$48,000 ÷ 800 hours = $60.

Payroll cost, including taxes and benefits, as a share of net sales.

Formula

Labor cost ÷ net sales × 100

Example

$7,200 ÷ $48,000 = 15%.

Visitors per staff member on the floor in an hour. A rising ratio during busy hours often shows up as falling conversion.

Formula

Visitors in the hour ÷ staff on the floor

Example

120 visitors ÷ 3 staff = 40.

Total hours worked by all employees in a period, the denominator for SPLH and the driver of labor cost.

Example

4 people × 8 hours × 25 days = 800 hours.

What’s left of net sales after the cost of goods sold, as dollars or a percentage of sales.

Formula

(Net sales − COGS) ÷ net sales × 100

Example

($48,000 − $24,000) ÷ $48,000 = 50%.

Profit as a share of cost rather than price. Easy to confuse with margin: a 100% markup is a 50% margin.

Formula

(Price − cost) ÷ cost × 100. Margin = markup ÷ (1 + markup)

Example

$20 cost, $40 price: 100% markup, 50% margin.

What you paid for the stock you sold in the period, including freight in.

Formula

Opening stock + purchases − closing stock, at cost

Example

$30,000 + $22,000 − $28,000 = $24,000.

Gross margin return on inventory investment: gross margin dollars earned per dollar of average inventory at cost, usually annual.

Formula

Annual gross margin $ ÷ average inventory at cost

Example

$120,000 ÷ $60,000 = 2.0.

How many times you sell through your average stock in a year.

Formula

Annual COGS ÷ average inventory at cost

Example

$120,000 ÷ $60,000 = 2 turns.

How many days your current stock would last at the current rate of sale.

Formula

365 ÷ annual inventory turns

Example

365 ÷ 2 = 183 days.

The share of stock received that has sold in a period. Used to judge a buy and time markdowns.

Formula

Units sold ÷ units received × 100

Example

120 sold ÷ 200 received = 60%.

Inventory lost to theft, damage, admin errors or supplier fraud: the gap between book and counted stock.

Formula

(Book inventory − counted inventory) ÷ net sales × 100

Example

$1,500 missing ÷ $100,000 sales = 1.5%.

A permanent or promotional price reduction. Markdown rate is markdown dollars as a share of net sales.

Formula

Markdown $ ÷ net sales × 100

Example

$4,000 ÷ $48,000 = 8.3%.

The budget left to purchase stock for a period without overstocking.

Formula

Planned closing stock + planned sales + planned markdowns − opening stock − stock on order (at retail or cost, consistently)

Example

$60k + $50k + $3k − $55k − $20k = $38k.

The sales level where gross profit exactly covers fixed costs: no profit, no loss.

Formula

Fixed costs ÷ gross margin %

Example

$18,500 ÷ 50% = $37,000 a month.

How far sales can fall before you reach break-even, as a share of current sales.

Formula

(Current sales − break-even sales) ÷ current sales × 100

Example

($46,000 − $37,000) ÷ $46,000 = 19.6%.

The extra profit a decision creates compared with not making it, such as a promotion or longer hours.

Formula

Gross profit with change − gross profit without − extra costs

Example

$8,349 − $7,500 promo GP over a week, minus $400 cost = $449.

Sales a new initiative takes from your existing sales instead of creating new ones, such as late-hour shoppers who’d have come earlier.

Formula

Moved sales ÷ sales in the new initiative × 100

Example

$250 of $1,000 late-evening sales moved from earlier = 25%.

How long an investment takes to return its upfront cost from the extra profit it creates.

Formula

Upfront cost ÷ monthly incremental profit

Example

$300 ÷ $150 a month = 2 months.