Retail KPIs: like-for-like sales and margins

A retailer's results announcement leads with like-for-like sales, not revenue, and analysts quickly move to margins and stock levels. Understanding how those KPIs are built from the accounts is essential for reading retail results. This guide defines the main retail KPIs, works through a like-for-like calculation and explains the IFRS 18 disclosure rules.

By Muhammad Bilal, Chartered Accountant. Reviewed by Awais Jameel, Chartered Accountant. 3 minute read.

Short answer

Retail KPIs such as like-for-like sales, gross margin, sales per square foot and inventory turnover are how retailers and analysts judge performance, but none is defined by IFRS. Like-for-like sales growth strips out new and closed stores to show how the existing estate is trading. From 2027, IFRS 18 requires subtotals of income and expenses used in public communications, such as adjusted operating profit, to be disclosed and reconciled as management-defined performance measures; revenue-only measures such as like-for-like sales are generally outside that definition. In this guide's example, total sales grow 10% but like-for-like sales grow 5.2%.

At a glance

Like-for-like sales
Same stores, year on year
Gross margin
Gross profit / revenue
Sales density
Sales per square foot or metre
Inventory turnover
Cost of sales / average inventory
EBITDA
Boosted by IFRS 16
IFRS 18
MPM disclosure from 2027
Retail KPIs: like-for-like sales and marginsLike-for-like sales: Same stores, year on year; Gross margin: Gross profit / revenue; Sales density: Sales per square foot or metre; Inventory turnover: Cost of sales / average inventory; EBITDA: Boosted by IFRS 16; IFRS 18: MPM disclosure from 2027.KEY FACTS AT A GLANCERetail KPIs: like-for-like sales and marginsLike-for-like salesSame stores, year on yearGross marginGross profit / revenueSales densitySales per square foot ormetreInventory turnoverCost of sales / averageinventoryEBITDABoosted by IFRS 16IFRS 18MPM disclosure from 2027Tax BakersRetail KPIs: like-for-like sales and marginsLike-for-like sales: Same stores, year on year; Gross margin: Gross profit / revenue; Sales density: Sales per square foot or metre; Inventory turnover: Cost of sales / average inventory; EBITDA: Boosted by IFRS 16; IFRS 18: MPM disclosure from 2027.KEY FACTS AT A GLANCERetail KPIs: like-for-like salesand marginsLike-for-like salesSame stores, year on yearGross marginGross profit / revenueSales densitySales per square foot or metreInventory turnoverCost of sales / average inventoryEBITDABoosted by IFRS 16IFRS 18MPM disclosure from 2027Tax Bakers
Key facts at a glance, as set out in this guide.

How are like-for-like sales calculated?

From last year's sales to this year's (CU million)From last year's sales to this year's (CU million)1,000Last year-30Closedstores+50Like-for-likegrowth+80Newstores1,100This year
Most of the growth comes from new stores.
CU millionAmount
Last year's sales1,000
Less sales of stores closed since(30)
Like-for-like base970
Growth in like-for-like stores50
Sales of stores opened in the last year80
This year's sales1,100

Total sales grew 10%, but like-for-like sales grew 50 / 970 = 5.2%. Most of the headline growth came from new space. Retailers define like-for-like differently: some include online sales, some exclude stores that were refitted, and most exclude stores open for less than a year. The definition should be disclosed and applied consistently.

How do omnichannel KPIs work?

Retailers selling in stores and online report online sales growth, online share of total sales, and conversion rates. Like-for-like measures increasingly include online sales, because a customer who browses in store and buys online is still a store-driven sale. Return rates matter more online, and are a common KPI for fashion retailers.

Why do calendar effects matter?

A 53-week year adds a week of sales, and a holiday moving between periods shifts trading. Retailers usually adjust like-for-like figures to compare equal periods, for example excluding the 53rd week, and should explain the adjustment.

Which margin measures matter?

Gross margin depends on what is in cost of sales: some retailers include store staff and distribution, others do not, so margins are only comparable within a company over time. Supplier income, shrinkage and markdowns all flow through gross margin, so a movement needs explaining in those terms. See supplier rebates and retail inventory.

What do inventory KPIs show?

Inventory turnover, cost of sales divided by average inventory, and its inverse, inventory days, show how quickly stock sells. Rising inventory days can signal slow-moving or obsolete stock that may need writing down, or a deliberate build-up before a peak season. Sales density, sales per square foot or metre, shows how productive the store space is.

How did IFRS 16 change retail EBITDA?

Store rents moved below EBITDA into depreciation and interest, raising EBITDA sharply for retailers with large leased estates. Many now also report EBITDA after leases, or pre-IFRS 16 measures, to show the underlying trend. See retail store leases.

What does IFRS 18 require for retail KPIs?

From periods beginning on 1 January 2027, a subtotal of income and expenses used in public communications to give management's view of performance, such as adjusted operating profit or adjusted EBITDA, is a management-defined performance measure: it must be disclosed in a note, explained, and reconciled to the most comparable IFRS subtotal, with the tax and non-controlling interest effects. Measures based only on revenue, such as like-for-like sales, and non-financial measures, such as sales density, are generally not covered. See management-defined performance measures.

Even outside IFRS 18, good practice is to define each KPI, show how it is calculated from the financial statements where possible, and keep the definition stable from year to year.

What are common pitfalls with retail KPIs?

Comparing like-for-like figures between retailers with different definitions, ignoring the effect of calendar shifts such as an extra week or a moved holiday, and treating EBITDA as cash generation while store refits and lease payments continue. See retail accounting.

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Questions people ask

What are like-for-like sales?

Sales growth in stores trading in both periods, excluding new and closed stores, showing how the existing estate is performing.

How is like-for-like sales growth calculated?

Growth in sales of stores open in both periods divided by those stores' sales in the prior period.

Are like-for-like sales a management-defined performance measure under IFRS 18?

Generally not, because they measure revenue only rather than a subtotal of income and expenses.

Why are retail gross margins hard to compare?

Because retailers include different costs in cost of sales, such as store staff or distribution.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS 15 Revenue from Contracts with Customers

Rules and fees change. If you are reading this long after October 4, 2026, confirm the figures with the source before you rely on them.

RetailRetail accounting: the key IFRS issuesIFRS 18Management-defined performance measures (MPMs) under IFRS 18RetailStore leases under IFRS 16

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