Our Edge Retail Academy data pool has expanded and now includes just under 1,000 stores.
Our data, which includes stores with at least three years of historical information, continues to show the independent retailer’s gross sales growing, up 4% for the rolling 12 months ending in January.
Units continue to decline year-over-year for independents, coming in at 5% down for the rolling 12 months and 11.5% down from two years ago.
While units continue to decline, the overall average retail sale continues to climb, up 10% for the rolling 12 months at $288, including all product and service sales.
Gross profit is up 4% for the rolling 12 months, and overall margin has held steady at 46 for 36 months.
Bridal sales continue to perform well, with rolling 12-month sales up 2.9%. Units and average retail sale are up ever so slightly, and margin has come up slightly from 44 to 45.
The bridal department represents approximately 30% of all gross profit.
While it is important to grow your bridal business, it’s equally important to ensure this is a profitable area for you. How do your sales compare to our industry data? Are you achieving sales growth? If so, is it also achieved while growing or at least maintaining margin?
Sales growth is pointless if margins are being sacrificed at a comparable level. Here are a couple of tips to help you improve margins achieved:
1. Review markup on fast-selling items. The 80/20 rule is alive and well when it comes to bridal. Research continues to show that approximately 20% of your bridal inventory is driving 80% of your bridal sales. Are you achieving better margins on your best-selling bridal pieces? More importantly, have you gotten rid of the non-performers? This will allow you to achieve higher stock turns, generating a better return on investment, and the approach better aligns with the evolving retail notion of “less is more.”
2. Look at your discounting policy. First and foremost, you should never discount your fast sellers. This simply makes no sense. Second, revisit your discount policies. Why are you discounting? Is it merely because the customer asked? Have you trained your staff on how to answer questions about discounting? Focus on value and points of differentiation and train, train and train some more. Finally, if you have a customer looking for a deal or you’re set on giving something away, have a tray of non-performers ready that you will happily discount to recoup your investment.
On these numbers alone, every extra percent of markup will add nearly $20,000 in pure bottom- line profit. It’s worth thinking about.