Page 78 - DMGT553_RETAIL_STORE_MANAGEMENT

Anand Thakur, Lovely Professional University Unit 5: Retail Arithmetic

Unit 5: Retail Arithmetic Notes

CONTENTS
Objectives
Introduction

5.1 Health of Your Business
5.2 Quantitative Terms Related with a Retail Store and its Calculation
5.2.1 Inventory Turn

5.2.2 How to Increase Your Margin?
5.2.3 Break Even Point
5.2.4 Retail Method of Inventory, or Stopping Shrinkage
5.3 Marketing in Retail
5.4 Summary

5.5 Keywords
5.6 Review Questions
5.7 Further Readings

Objectives

After studying this unit, you should be able to:
Define retail arithmetic
Describe health of your business
Discuss quantitative terms related with a retail store and its calculation

Explain marketing-retail

Introduction

The retail industry is at the centre of a dramatic shift in the way consumers shop and interact
with retailers. Retail is, indeed, a numbers game. Here we have provided you with the basics of
retail math. Still, they are only the basics. Along the way, you will encounter nuances of retail
numbers that will only add to your experience in this competitive, thriving, and ultimately
rewarding field. Knowledge is the key to success. Knowing the numbers before you start your
retailing adventure is vital to your success. Certainly there is a lot to learn, but understanding
the basics will help you fine tune the rest and, in the meantime, will keep you alive and well, the
latest addition to the thriving retail industry.

Retailers typically keep a two-column ledger in order to fully understand what is going on with
their business. In the left column, they keep a running record of the cost of the merchandise, the
landed price including the cost of goods and shipping costs. In the right column, they keep a
running record of the retail value of the merchandise, the sum of the retail price tickets on all the
items in the store. This method lets you keep track of the markdowns in the right column so you
can see at a glance the profitability of an item, department, and store. Also, this approach shows

LOVELY PROFESSIONAL UNIVERSITY 73