Definition
Same-store sales is a business term which refers to the difference in revenue generated by a retail chain’s existing outlets over a certain period, compared to an identical period in the past, usually in the previous year. By comparing sales data from existing outlets, the comparison is like-to-like, and avoids comparing data that are fundamentally incomparable. This financial and operational metric is expressed as a percentage.
Same-Store Sales
What does ‘Same-Store Sales’ mean
Same-store sales is a financial metric that companies in the retail industry use to evaluate the total dollar amount of sales in the company’s stores that have been operating for a year or more. Same-store sales statistics provide a performance comparison for the established stores of a retail chain over a given time period, such as a fiscal year or quarter or a calendar year or quarter, comparing revenues for the current period to the same period in the past, for example, comparing first-quarter 2016 revenues to first-quarter 2015 revenues.
Explaining ‘Same-Store Sales’
Examining same-store sales figures is helpful to investors in determining what portion of a company’s current sales revenues are a result of sales growth in existing locations and what portion is accounted for by the opening of new stores.
Why Same-Store Sales Figures Matter
Same-store sales figures are important points of analysis for the management of a retail chain and for investors evaluating the chain’s current and likely future performance. Market analysts frequently use same-store sales to determine the effectiveness of the management of a retail chain in producing revenue growth from existing assets.
Further Reading
- On the value relevance of retailer advertising spending and same-store sales growth – www.sciencedirect.com [PDF]
- The impact of price-based and new product promotions on fast food restaurant sales and stock prices – www.tandfonline.com [PDF]
- Opportunities and risks of combining shopping experience and artistic elements in the same store: A contribution to the magical functions of the point of sale – www.tandfonline.com [PDF]
- Do industry-specific performance measures predict returns? the case of same-store sales – papers.ssrn.com [PDF]
- Restaurant consumption as an economic indicator – journals.sagepub.com [PDF]
- What do chain store sales tell us about consumer spending? – papers.ssrn.com [PDF]
- Gambling at lucky stores: Empirical evidence from state lottery sales – www.aeaweb.org [PDF]
- Consumer financial protection – www.aeaweb.org [PDF]
