Retailer Newsletter
January 1, 2017
Tom’s Business “TIPS”
“To Improve Profits”
RE: Industry Benchmarks & Valuable Formulas for Your Business
Hi,
Happy, Prosperous, and Safe New Year to all!
Many of you have attended a seminar about the convenience store (small business) with me in the past. I’m writing this email simply as a reminder of how to correctly achieve the proper gro$$ profit on store sales and the up-dated industry benchmarks for sales and expenses.
Many store owners struggle with ‘how to determine the correct retail price’ in their store. I have attached couple of formulas to this email as reminders.
I’ve spent 28 years in the business as a c-store, service station owner facing the same day-to-day problems you face every day. If you don’t correctly price your store products you are missing out on potential, vital gro$$ profit dollar$. I understand many of you carry ‘pre-priced’ products in your store. I believe you should compute the GP% for these items simply because you need to decide if you can afford to carry these products at the pre-priced retail.
I have also attached our up-dated ‘Industry Benchmarks’. Many of you received this important tool at a seminar with me. While there is much debate in the retail world about the accuracy of the benchmarks, the true answer lies in the bottom line. Your store should average 23 – 28% (without lottery and car wash). If you are significantly below this benchmark there are generally two reasons:
1. Merchandise is priced too low (incorrectly computed).
2. Shrink (too much employee and/or vendor theft).
(Or a combination of both)
Remember, the national average ranges 23 – 28%, indicating one-half of the stores are ABOVE and one-half are BELOW. Where do you want to be, above or below? The choice is truly up to you to decide. Don’t make excuses for being on the bottom half! I always felt I worked too hard, had too much time & $$ invested in my business not to be in the top half, the very top half!
Also attached is a summary report containing the Kansas City C-Store 12-month Averages. I have traveled much of the United States and the stores here in KC are typical to most American cities. Many of the stores are operated by a single store owner, maybe a few operate 2 or 3. They have the same problems you incur each day. I share this information with you so you can see for yourself just how your numbers should compare to real-world operations.
If you have trouble opening the attachment, let me know and I will try something different for you.
I’ve been conducting seminars about our business for over 11 years and I have met many owners and managers across the country who expect or think somebody else is watching over the pricing of their store. You should constantly be checking your most recent invoices for price changes and verifying the scanner in your store with the shelf price labels. If you are not scanning your products at the register, you are definitely missing out on valuable gross profit $$.
We’ve helped a lot of store owners (large and small) become more profitable through some simple ideas that will make a difference. Give us a call; we can help your business.
OBTW, at a recent training seminar a couple of the participants mentioned they enjoy reading my monthly emails. One person asked if I answer questions by email or on the phone. I told him I generally receive 2-3 calls (or emails) per week from people I have met over the years at a seminar or a consulting visit to their store. So maybe I haven’t told you recently that I do in fact answer your calls or emails with questions about our industry.!
Don't be a victim of the 5 Dangerous Words –
‘Maybe I’ll Do It Tomorrow’
Do it today! Because nobody is going to do if for you!
I look forward to hearing from you.
Tom
Thomas W. Terrono
T&S Management Services, LLC
Instructor / Consultant for the Convenience Store Industry
Lee's Summit MO 64082
816.550.8048 cell
816.366.0641 office
@tomterrono
www.tsmanagementservices.com
“Our business is making your business better!”