Lessons for Competing in the Tough World of Retail

Barry Berman

There are a number of financial ratios and other benchmarks that can be used to document the questionable future of retailing after the formal recession has ended: comparable or same-store sales data, sales per square foot, net profit as a percent of sales, increases in bankruptcies, store closings, the proportion of retailer-based credit accounts that are delinquent beyond 90 days, and so on.

The most troubling barometer of the poor health of the retail industry is data showing stagnant or declining same-store sales of many retailers. Slow or negative same or comparable sales growth directly affects a retailer’s profits, stock market valuation, and the ability to purchase new goods, ...