Of late I’m hearing retailers having challenges maintaining let alone increasing margin!
Stores across Canada are experienced a flatting out or drop in overall sales. Perhaps due to no more Dr Oz effect however whatever the case the combination of less margin and lower sales is a formula for increased stress from ownership/management down throughout the business.
Your business may have a mission to bring wellbeing, sell safe natural products, and make a difference in the health of your community however without having enough margin at the end of your sales you will be unable to accomplish your mission.
There are many factors why margins are eroding so it is important to identify as best you can where the slippage is coming from.
Of the solutions I have heard to recover, maintain and increase margin the best is from a retailer who runs a successful full service medium size health food store.
First he FOCUSES on is margin!! If you do not give any attention to the margins they will generally slip over time.
He does not only determine his business success by top line sales but just as important or perhaps more are the average store margins by department.
Each week he meets with his buyers to review department margins, compare to the department margin expectation/target they have set and discuss ways to increase margin whether smarter buying, merchandise/cross promote lower margin sale products next to high margin regular priced products or training floor staff to recommend brands that bring the best margin to the business.
Know the brands that provide the best margins, educate your staff on these brands and learn to recommend these brands first!
He also incentives his buyers for increasing or maintaining margin. Reward behavior you want repeated.
This could be as simple as a dinner out for a department that reaches a margin target over a 3 month period.
REMEMBER 1% extra margin on $1M sales = $10,000 extra to cover expenses.
I ran across this from an article I wrote in early 2000’s for CNHR and felt it was worth a rerun. Look over the list, see what you do well, see where you may improve however realize what you do every day makes a difference in the lives of the people in your community! The […]
Key areas of focus to thrive are sales, profit and inventory. Sales is generally the first focus of a business for no sales no business. Often mood is determined on a day’s sales. For some it is Wall Street for others it is their own independent business. Is our stock rising or falling? Customer service, […]
While shopping at my local health food store this past weekend I struck up a conversation with a fairly shy young woman about what she was demoing…when she opened up she became very animated and passionate about what she was demoing. She spoke from her heart as she described the humane treatment of the animals, […]