As of 2019, there are approximately 66,000 combined gas station and convenience stores across the United States. Competition within the industry is high, and store owners are struggling with how to handle it.
Retail technology, such as your POS system, can provide a great deal of information, but finding actionable data you can turn into results can be tricky. Cut through the noise and focus on major measurable metrics for a clear picture of your performance.
Here are three c-store key performance indicators to monitor:
Inventory shrinkage rate determines the percentage of inventory lost from production point to the point at which it is sold. You can determine the rate of shrinkage by conducting a physical count of your inventory and calculating its cost, then subtracting this from the cost listed in your accounting records. Divide the difference by the amount in your accounting records to get the percentage rate.
Reasons for shrinkage could include:
To improve your inventory shrinkage rate, place a high priority on the placement of your inventory in store, as it has a significant impact on the margin of error and visibility of your products. Additionally, integrate with automation to better track inventory, reduce paperwork errors, miscounts, mislabeled goods, and avoid theft. Leverage technology to train employees to look for signs of theft and fraud. Create inventory loss awareness, and use the data garnered from your POS to determine the measures you need to reduce shrinkage and improve your bottom line.
Sales per square foot measures your store’s average revenue for every foot of sales space. This is an important metric because it tells you how efficient you are with your use of available space resources. If you have multiple stores, this is especially important to measure so you can see whether some of your locations utilize space better than others.
Determine your sales per square foot by dividing each location’s sales by its total square feet of useable sales space. This helps to determine how effective your layout is, and what the best locations may be for featured products to maximize profitability.
The average customer spend is an important c-store key performance indicator, because the average dollar spent per transaction can give you a macro view of how much your customers are spending, as well as the items and quantities they buy. Determine this by measuring the average transaction value and divide your total revenue by the number of transactions.
Knowing this key metric helps owners manage item-level inventory, and balance the product mix you offer to meet customer demands. You can use this to determine things like the percentage of sales from tobacco, alcohol, or lottery sales, and then see if it would be viable to invest in self-checkout for other purchases to speed up the process and improve the customer experience, while freeing up employees for purchases that require age verification.
While it’s easy to guess whether or not your store is doing well by month-to-month sales, having concrete, actionable data like these c-store key performance indicators can help you gain a better understanding of your business as a whole, and the different factors that influence the performance of your stores. Advanced back office reporting software designed specifically for convenience store, like what is offered by Petrosoft, can provide you with this valuable data. If you are interested in learning more, contact the experts at Petrosoft today!