Definition of Same-store Sales
What does the term "same-store sales" mean? What is meant by the term "same-store sales"?
Same-store sales is the comparison of a retail chain's sales in existing locations over a certain period of time.
For instance, you might hear something in the news such as "Black Friday same-store sales at Sears were up 2% over last year".
Same-store sales are important because they exclude the sales that occur at newly opened locations. For instance, let's say that a retail chain had 100 locations. Let's say that this chain opened up 50 new locations over the course of a year. If we said that sales were up 25% over the course of a year, this wouldn't be a very good indication as to how the chain was doing, as they would have opened up so many new locations over the course of that time. Instead, by excluding the newly opened stores and strictly comparing sales at existing locations to the sales from a year ago, we are able to get a better idea as to how the chain is doing.
So, in the case mentioned above, we might say something like "same store sales compared to a year ago were down 7%". This would indicate to us that the chain is not doing well, as sales at existing locations were lower compared to the year before.
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