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Editor’s view: like-for-like isn’t the end of the story

Like-for-like sales figures are always seen as one of the key numbers in a retailer’s balance sheet. As a measure that can be benchmarked against a known quantity, it is easy to see why. But as changing trends accelerate during the recession, like-for-like figures tell less and less of the full story. By Matthew Valentine, Editor

GENERAL MERCHANDISE

Editor’s view: like-for-like isn’t the end of the story

Like-for-like sales figures are always seen as one of the key numbers in a retailer’s balance sheet. As a measure that can be benchmarked against a known quantity, it is easy to see why. But as changing trends accelerate during the recession, like-for-like figures tell less and less of the full story. By Matthew Valentine, Editor

Flat like-for-likes may not look that impressive, but if they are allied to a fourfold increase in online sales the numbers may be seen in a new light. As shopp
er behaviour changes at an ever faster rate, comparing the sales at a particular store from year to year may become a misleading way to judge how well companies are performing overall.

Certainly there have been cases this year of companies reporting a fall in like-for-likes, while achieving real growth in multi-channel transactions. In ten years, online sales have gone from being a novel way for geeks to buy software to a mainstream channel that almost all of use - when it suits us.

It seems to suit us increasingly often, and anybody fond of a wager would surely be more likely to put their money on the fastest future sales growth being outside the traditional store. So does that mean it is time to retire like-for-like sales as a key measure?

The simple answer is no - it is still a valuable measure of performance, and professional analysts have always treated it as one of a number of factors that must be taken into account. But the days of other commentators, including some sectors of the media, using like-for-likes as a universal bellwether of trading health must surely be numbered.

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