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Retail Comp-Store Sales Becoming A Useless Measure

by Robert Hetu  |  January 6, 2016  |  1 Comment

I started writing this blog post back in August but never finished.  Not because it wasn’t true or important, but wanting to be sure I conveyed the message clearly. The retail revolution is in full swing.  Large multi-channel retailers are investing in digital channels and seeing tremendous growth in sales from these channels. John Lewis, a forward thinking employee owned retailer in the UK posted an overall positive sales increase for the holiday, bolstered by a 21.4% increase in eCommerce, even while comp-store sales decreased slightly.  When retailer after retailer posted flat to slightly negative comp-store sales, although growing eCommerce, and in spite generating profits, this is seen as a negative.  I am calling for rational reasoning among financial analysts as its unrealistic to expect significant comp-store sales growth with the shift in consumer shopping patterns.  While clearly double digit declines, as were reported by some, are cause for alarm. I expect that as the penetration of digital sales grows many successful multi-channel retailers will continue to report mediocre comp-store sales results.  While contraction in store base will help to offset this we are still a long way from a store-less society.  Other performance metrics are more important indicators of health including generating a profit.

Anyone with an understanding of multi-channel retailing knows that its increasingly difficult to put sales into a bucket.  eCommerce, mobility and social media all drive sales in stores, and we know that in store activity drives eCommerce.  Customers do not think in channels and retailers and financial markets have to stop as well.  The only thing that matters is top line sales growth compared apples to apples.    Retailers need the freedom to invest in new technologies and should be rewarded based on overall performance.

 

Category: retail-trends  trends-predictions  

Tags: comp-store  competition  consumers  digital  ecommerce  economy  multichannel  omni-channel  retail  revenue  stores  trends  

Robert Hetu
Research Director
6 years at Gartner
29 years IT Industry

Bob Hetu is a Research Director with the Gartner Retail Industry Services team. His responsibilities involve tracking the technology markets and trends impacting the broad-based retail merchandising and planning areas. Mr. Hetu is an expert in the areas of brand, vendor and assortment management, merchandise planning, allocation, and replenishment. Read Full Bio


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