For the first five years of my career- the holy grail in retail was psfpd (per sq ft per day sales). All the numbers, buying plans, profitability projections, rental decisions - centred around what the psfpd projections were. The fact that India was shining (as they wanted to believe us) has something to do with this optimism (get the topline, profits will follow)
My next five years have seen shift to the level of obsession - towards Full price Sell Through and gross Margin % as the indicators of retail performance. Again - the recession, failure of many a retail ventures, and the perception that it is impossible to make money in retail has fuelled 180 degree shift.
In the last six months - working with arious teams- I have come to realise that age old "Rupee gross margin per sq ft" - is the term that will offer way ahead to people looking at profitability in retail.
While rupee gross margin per sq ft has always been the focus for bog box retailers, EBO's never looked at this as the concept to follow. No wonder there were missed opportunities on higher sales (trying to chase better gross margin %, or there were unprofitable ventures even after achieving stupendous psfpd's)
I am working on a matrix that can correlate the three. if the Disclosure policy of my organisation allows me to upload the results, should be able to do it in a months time.
