The Store Walk · Issue 01 · read it free
Your store P&L is telling you three things. You're probably hearing one.
Most operators read the store P&L the same way. They look at sales, compare them to last year, and move on. If sales are up, the store is "doing fine."
That habit hides a lot of losses. Sales tell you whether customers showed up. They don't tell you whether you made money from them. A store P&L answers three questions, in this order.
1. Are we selling enough? Look at sales against plan, not just against last year. Then divide sales by labor hours. A store can beat last year and still be understaffed for the traffic it has, or overstaffed for the traffic it doesn't.
2. Are we paying the right amount to sell it? This is labor as a percent of sales. The question isn't "how many people do we have?" It's "are the hours in the right part of the day?" Most schedules are built around the people a store employs, not around when customers walk in.
3. Are we keeping what we buy? This is cost of goods plus shrink. Ordering without set stock levels, unmanaged markdowns and sloppy receiving all show up here. It's usually the biggest number on the page and the one that gets the least attention.
What this looks like in practice
Picture a 12-store chain with sales up 8% on last year. Everyone's happy. Then you read the rest of the page. Labor is running 2.1 points over plan because schedules follow availability, not traffic. Cost of goods is 1.5 points high because stores order by feel. Shrink nobody records costs another 0.8 points. On about $19M in sales, that's roughly $850k a year leaking out below the top line, while the sales report says everything is fine. (An illustrative example, not a client.)
Try this Monday: the 15-minute P&L read
Pull last week's P&L for each store and answer three questions, in order:
- Did we hit our sales plan, and how much did we sell per labor hour?
- Where were the labor hours that didn't match traffic?
- What did we buy that we didn't sell, and why?
Write one fix for each. Pick the one that's worth the most money and do it this week.
That's issue 01. Every other Tuesday, The Store Walk sends one fix like this that you can use in your stores that week. Subscribe at the top of this page to get the next one.