Hi Anonymous,

you can structure the process as follows:

1. Understand what is creating the problem for store B:
   1. Identify how profits are segmented (eg product or customer)
   2. Identify which segment has the profitability issue compared to A
   3. Identify if for that segment you have a revenues or cost issue
   4. If it’s a revenues issue: understand if it’s a price or volume issue. If it is a cost issue: understand if it’s a fix or variable cost issue.
   5. Understand why you are having the problem in that bucket. You can analyse this dividing in internal and external reasons that could create the problem.
2. Understand what could be the solution to increase profits. In general you could work on
   1. Revenue side
      1. Work on current product
      2. Work on new products
   2. Cost side
      1. Decrease cost per units of input
      2. Decrease number of units of input
3. Consider potential risks and next steps in the implementation

Best,
Francesco

Hi,

I would look at the following:

Revenues

1) Average check

• Length of the check
• Product mix in the check

Key check drivers:store format (space and assortment / price / product quality), promo & discounts, personal sales (fashion, electronics), loyalty programs, merchandising, stock availability, etc.

2) Number of customers

• Traffic
• Conversion - important in fashion and consumer electronics. less relevant for grocery

Key customer drivers: Location, Time opened, brand awareness, store format (space and assortment / price / product quality), external factors (parking, signage, etc), in-store experience (queues, look and feel, etc)

Costs

1) Fixed

• Labour
• Rent
• Utilities
• Marketing

2) Variable

• COGS

Best!

(edited)