According to information published by the Polish Central Statistical Office, there are over 300 000 retail outlets in Poland. Officially, at the end of 2011 there were nearly 345 000 of them. Most of them (90%) are shops with floor area of not more than 100 m2. This means that the floor area of an average shop is about 60 m2. Monthly costs of maintenance of such an outlet are varied, however, the amount of PLN 25 000 can be assumed as a minimum value.
What turnover does a shop need so that its operation is justified?
The answer is simple – the margin obtained from the sales must cover the costs and generate profit for the owner.
Let us assume that the margin achieved on the goods sold amounts to 20% and the owner expects 10% profit. With those assumptions, the monthly turnover should amount to nearly PLN 180 000. So the annual turnover of the shop should be PLN 2 160 000.
In order to increase business security and as a result of natural growth, companies often run several or a dozen shops. Let us assume that the model chain is composed of 10 similar shops. The annual turnover of such a chain exceeds PLN 20 million.
These are high amounts, where the introduction of elements that facilitate work, incentivize employees and customers will contribute to the growth of profitability of the business.
A very high potential can be found in the option to incentivize employees and customers. By implementing simple, automatic solutions in a chain, it is easy to achieve a growth in turnover of 2.5%. For our model chain, this means an increase in turnover by PLN 0.5 million.
Our long experience shows that the differences in profitability among comparable retail outlets can reach as much as 40%. This means that a shop equipped and run in an optimal way produces 40% better results than a shop that is not properly run.