Retail Maths

What is Retail Maths?

Most people’s eyes glaze over when they hear the term ‘retail maths’ mentioned. I guess they have some bad memories from their school days. I call this ‘Maths Gone Bad’.


In every business, crunching numbers is as important as the air you breath. Numbers tell the story, the performance of your business. We managed by numbers. Numbers need to be analysed to ensure profitability, to control the daily pruchasing, and the management of your business. We use the data that our numbers produce to aid our decision making in almost all aspects of the business. It’s our score-card. Doing otherwise is known as flying by the seat of your pants, and is a good way to lose your pants in the process.

Retail maths is not difficult. Often it just involves a few formulas. All you need to know is which are your key performance indicators, and to interpret the results. Retail maths is a major compenent of the work process before the allocation of resources. It drives your pricing strategy, your purchase planning, your advertising cost, and your operational expenditure.

It makes no difference if you are a single outlet retail operator or running a chain of retail stores. Retail math is used to determine the direction the business is headed. It is used to determine the flow of merchandise into your store. It shows you the lead-time required to get your inventory delivered. It affects your pricing, promotional, advertising of those merchandise, the manner and time you do your markdowns.

The retail calculations in your business should not be a case of ‘Maths Gone Bad’.

Click here to read more books on Retail Operations and Retail Maths.

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