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LIKE-FOR-LIKE SALES

Sounds vaguely familiar?

It’s a phrase used a lot at this time of year when all retailers report how they fared during the traditional Christmas trading season, which is crucially important for their annual numbers.

What does it mean?

Like-for-like sales are an attempt to compare apples with apples. As retailers are constantly opening and closing shops, changing the fabric of their store portfolios, it is diffi- cult to see exactly how their sales perform. So like-for-likes compare sales at those stores open for at least a year.

What does it show?

In theory it is the clearest indicator of retailers’ actual trading performance. However, retailers often chop and change the precise period when like-for-like sales are reported. They do this to make their sales look better. For example, one year they may report for the 12 weeks running up to December 31. The follow- ing year they could switch it to just ten weeks, removing two weeks of disappointing sales and improving the average.

Doesn’t sound helpful.

Quite. There has long been criticism from investors and City analysts that the moveable feast that is the like-for-like sales data is impossible to compare among retailers. They also fail to give the true picture of how a group is trading. Still, we’re unlikely to see that change any time soon as almost all retailers do this.