How to compare sales between outlets fairly

The total is the wrong first number

When owners compare sales between outlets, they usually start with the monthly total and rank from top to bottom. The biggest number wins, the smallest gets the worried phone call.

The trouble is that a total mixes how well an outlet sells with how much chance it had to sell. A bigger shop, open more days, in a busier mall, will almost always post a bigger total. That tells you about its size and hours, not about how well it is run.

What makes a raw total unfair

Size. A 1,500 square foot outlet has more shelf space, more seats or more counters than one half its size.

Days open. One outlet trades every day; another closes on Mondays. One was shut for three days for renovation. A month of 31 days is not 31 trading days everywhere.

Opening hours. A mall outlet that closes at 10pm and a shoplot that closes at 6pm do not have the same number of selling hours.

Location. A mall with heavy weekend traffic and a neighbourhood row of shops serve different crowds. That is a real difference, but it is not the manager doing a better or worse job.

New outlets. An outlet that opened halfway through the month has half a month of sales. It also tends to get a first-weeks rush that may not last.

Three fairer measures

Sales per open day. Divide the month sales by the number of days the outlet actually traded. This removes closed days, renovations and part-month openings.

Sales per square foot per open day. Divide again by the floor area. This shows how hard each square foot is working, so a small outlet is not punished for being small.

Same-store comparison. When you compare this year with last year, use only the outlets that were open for the whole of both periods. New outlets lift the group total without telling you whether the existing business grew.

A worked example

Here is a made-up example for one month of 31 days.

The mall outlet sold RM 186,000. It is 1,500 square feet and was open all 31 days. The shoplot outlet sold RM 117,000. It is 750 square feet and closes on Mondays, so it traded 26 days. The new outlet sold RM 63,000. It is 600 square feet and opened on the 17th, so it traded 15 days.

By total, the order is mall, shoplot, new outlet, and the new outlet looks weakest by far.

Per open day: the mall made RM 186,000 / 31 = RM 6,000 a day. The shoplot made RM 117,000 / 26 = RM 4,500 a day. The new outlet made RM 63,000 / 15 = RM 4,200 a day. The gap is much smaller than the totals suggested.

Per square foot per open day: the mall made RM 6,000 / 1,500 = RM 4.00. The shoplot made RM 4,500 / 750 = RM 6.00. The new outlet made RM 4,200 / 600 = RM 7.00. The order has turned around completely. The mall, the top outlet by total, gets the least out of each square foot.

Same-store, in the same example

Last year the group had only the mall and the shoplot, and in the same month they sold RM 300,000 together. This year the whole group sold RM 186,000 + RM 117,000 + RM 63,000 = RM 366,000.

Against last year, that is RM 66,000 more, up 22%. It sounds like a strong year. But the two outlets that were open both years sold RM 186,000 + RM 117,000 = RM 303,000, only RM 3,000 more than RM 300,000. Same-store growth is 1%. Almost all of the growth came from opening a new outlet, not from selling more in the old ones.

What to do with the fairer numbers

Use each measure for the question it answers. Sales per square foot per open day helps you judge how well a space is used, and whether a bigger or smaller unit makes sense next time. Same-store growth tells you whether the business you already have is growing.

Be careful with a new outlet. A strong first two weeks can be opening curiosity. Check it again after three months before drawing conclusions.

And remember that sales are not profit. A busy outlet can still lose money after rent and staff. That is a separate question, and worth asking straight after this one.

Ask it in plain words

This is a question you can ask iSenang, your AI data analyst, in plain words, for example "compare sales by outlet for last month, per day open". It answers from your own sales data, and if something it needs is not in your data, such as floor area, it says so instead of guessing.