Category: Perspective

Checking the "Vital Signs" of Retailing

3/20/2023

The Retail Owners Institute® makes it easy for you to get a quick financial health assessment of your own stores, as well as the retail industry, and every vertical within it.

From farm stores to apparel stores, wine stores to tire dealers, gift shops to convenience stores; all 45 verticals.

Here's how to get started.

Go to the Retail Benchmarks page of The ROI site.
Scroll down the page to see the links to all 45 retail verticals.
Choose the vertical that includes your stores; immediately go to that vertical's Benchmarks page.
See the results for each of 6 key ratios for the past five years. To get a better look, just click each image to make it larger.

Quite a picture, isn't it? Which ratios are trending up? Down? Any suggest some shaky times ahead? Any surprises? But most importantly, how will yours compare?

Index of Retail Sales Potential

1/17/2023

Managing inventory – arguably the #1 responsibility of a retailer – has been beset by a host of new and sometimes daunting challenges since 2020.

The last few months of 2022 only made matters worse. As supply chain issues seemed to subside, foreboding talk of a recession dominated, dampening customer spending.

Many retailers are feeling a bit over-inventoried as a result. Similar to that sense of having a few added pounds after the holidays.

In other words, a situation that is crying out for perspective. And we've got you covered on that!

Use our unique Index of Sales Potential, or "Inventory Gadget" for short.

What Is "Value" for YOur Customers? Really?

11/14/2022

What is the definition of "value" for customers? Pretty straightforward, actually.

Value = benefits received for the burdens endured.

Wait. What? "Benefits received?" "Burdens endured?"

Turns out, the only single answer to "What is value?" is, "It depends."

Don't just roll your eyes. What constitutes value for your customers increasingly is a make-or-break part of retailing.

Important: Look Behind top Line Sales Numbers

11/7/2022

Consider this retailer, whose sales over the last 4 weeks are down 12% compared to last year.

Some retailers in this situation essentially freak out.

But others know to keep asking questions. Before they decide what to do next to fix lagging sales, they want to know "Why?"

So, here is one way to get to the numbers behind the numbers; to begin to know the "why" of your sales trends.

All it takes is tapping into the data that's already in your POS system, and putting together a little summary tally sheet. Here's one example.

Spoken Like a Retailer, But...

9/12/2022

It's back-to-school season!

We were struck by comments from folks for whom "back-to-school" is more than just a season.

Look what a state superintendent of public instruction* had to say about the upcoming school year.

"The sheer burnout of the last two years caught up with everybody."
"But out of that came a genuine assessment of what matters most."

Lots of retailers can identify with those comments, don't you agree?

Or, these observations about the disruptions and uncertainties of the pandemic:

Get Ready. A New, Upbeat Era is Coming!

8/29/2022

As the final third of the year approaches, there's a "new era" afoot. There is optimism in the air.

Optimism? Really?

Yes! And it could catch a lot of folks by surprise.

Consider these "early warning signs" of approaching good news:

Those surveys of "consumer attitudes" indicate that folks do reflect the news headlines regarding the economy – that is, respondents are pessimistic about "the economy." But when asked about their own financial situation, the responses were very positive; people feel good about their personal financial situation.

Which Retailers Are Best for the "Never Normal"?

8/22/2022

You've no doubt seen the headlines and the commentary:

"Retailers Stumble Adjusting to More Selective Shoppers" *
"Consumers Uneven Spending Fuels Caution Among Retailers" **

Consumer spending is up, but not on what was expected, especially those publicly-traded chains that must report quarterly.

"As people watched the prices of food and gas rise, their spending became more selective, leaving retailers with shelves of inventory they couldn’t get rid of." *
"Although some consumers are cutting spending on goods, it is being accompanied by increased spending on services," according to Mark Zandi, chief economist of Moody's Analytics. **

The Clock Is Ticking. Watch Out!

7/25/2022

One of the real killers of a retail business can be debt. But, how much is too much?

Debt can be quite stealthy as it grows.

Seemingly small expense increases add up in the aggregate – maintenance costs, security, advertising, utilities, payroll, e-commerce charges, etc.
Vendors may be eager to offer terms, but that too is more debt. Whether or not you pay interest on it, you still are obligated to pay. And vendors would rather have an accounts receivable from you – it's an asset for them – and a debt for you.

Especially in these times of increasing interest rates, creeping expansion of debt can quickly snowball into a much larger problem.

From the Benchmark pages on The ROI site, we have selected four retail verticals whose Debt-to-Worth ratio shows a frightening situation. The technical term we would use is "spooky, real spooky."

(Click on each chart to see all the key ratios for that vertical.)

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