OAK BROOK, Ill. -- In just weeks, retailers will get their first glimpse at the numbers that will answer how well the convenience store industry performed in 2005. In a sense, the NACS State of the Industry is a channel-wide benchmark.
On Thursday, however, retailers can learn how one retailer went from being a sub-par operator to one of the industry's best during Thursday's CSPNetwork CyberConference titled How's Business 2006Improving Your Bottom Line. Click here to register for the CyberConference.[image-nocss]
The scariest part of Martin Smith's journey was that he thought he was doing well before, but further scrutiny showed otherwise.
Smith, president of 13-store chain Elmer Smith Oil Co., Clinton, Okla., had celebrated his company's overall performance when he enrolled in a benchmarking group run by CSX LLC, Columbia, Mo. Lined with other companies, Smith quickly discovered that not only was he not performing in line with the average players, but that his company was in fact ranked in the bottom quartile.
The harsh realization sparked an overhaulnot the quick dump-the-dogs mentality, but a reassessment of the matrixes he used to define success. He began to look at his stores from a gross profit dollar per labor dollar [perspective], said industry consultant Gene Gerke, a founding partner at CSX. Labor is the No. 1 cost for any operator. Most retailers judge their numbers based on sales per labor hour, or transaction per labor hour, which is better.
Indeed, CSX reports that for the first 11 months of 2005, the top 25% of its exclusive database generated nearly $2.90 in gross profit for every $1 spent on labor. In contrast, the bottom 25% produced almost 50 cents less gross profit per labor dollar.
People need to understand not only how they are really performing but how can they improve their results, Gerke said.
To learn how to better your company's performance, register today for Thursday's CSPNetwork CyberConference, How's Business 2006Improving Your Bottom Line. First 50 retailers and wholesalers register for free.
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