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Measuring your store's operating performance

By Furniture Today Staff -- Furniture Today, December 30, 2001

Comparing your store's key performance measures with other furniture stores is important because these benchmarks enable you to assess your store's overall operating and financial performance. That assessment in turn will let you know what direction your operating strategy should take in 2002.

Quantitatively, profitability is measured by net return on sales, return on assets, return on net worth, and gross margin percent.

This worksheet enables you to compare your store's performance with other retailers.

This data originally appeared in the July 9, 2001, and Sept. 17, 2001, issues of Furniture/Today, "The 2001 Furniture Store Performance Report."

	Large stores>$20M	Medium stores $5M-$20M	Small stores&$5M	Your store 2001 actual	Your store 2002 goals
Profitability measures
Median response
Net return on sales	3%	4%	6%	_________	_________
Net income divided by net sales
Return on assets	6%	13%	11%	_________	_________
Net income divided by total assets
Return on net worth	19%	29%	23%	_________	_________
Net income divided by net worth
Gross margin percent	44%	43%	43%	_________	_________
Net sales minus cost of goods sold divided by net sales
Efficiency measures
Percent of sales by payment method
Cash	21%	32%	41%	_________	_________
Bank cards	47%	40%	37%	_________	_________
In-house credit	19%	11%	12%	_________	_________
Deferred payment plans offered by the store and managed by the store
Other financing	13%	17%	10%	_________	_________
Deferred payment plans offered by the store and managed by a third party
Closing ratio	29%	33%	32%	_________	_________
Customer purchases as a percent of customer visits
Percent of merchandise returned by customers
Median response
Case goods	3%	5%	1%	_________	_________
Upholstery	2%	5%	1%	_________	_________
Accessories	1%	5%	1%	_________	_________
Real estate
Percent of gross space, by function
Selling space	57%	56%	69%	_________	_________
Warehouse	34%	36%	25%	_________	_________
Administration	6%	5%	5%	_________	_________
Other	3%	3%	1%	_________	_________
Capital expenditures
Percent of stores reporting capital expenditures in 2000
	83%	55%	33%	_________	_________
Percent of stores planning capital expenditures in 2001
	94%	53%	36%	_________	_________
Buying practices
Buying group membership, 2001	47%	41%	23%	_________	_________
Percent of sales that are special order
Median response
Bedroom	10%	25%	30%	_________	_________
Dining room/casual dining	5%	25%	30%	_________	_________
Entertainment centers	5%	15%	20%	_________	_________
Desks/home office	5%	15%	30%	_________	_________
Occasional tables	4%	15%	10%	_________	_________
Fabric-covered upholstery	20%	40%	50%	_________	_________
Leather upholstery	15%	25%	32%	_________	_________

	All stores	Your store 2001 actual	Your store 2002 goals
Employee practices
Median response
By function
Percent of total staff
Administrative/office	29%	_________	_________
Sales	36%	_________	_________
Warehouse/delivery	27%	_________	_________
Janitorial/maintenance	3%	_________	_________
Repair/deluxing	4%	_________	_________
Other	1%	_________	_________
Payroll as a percent of sales	17%	_________	_________
Total payroll costs divided by net sales; excludes fringe benefits
Fringe benefits as a percent of sales	3%	_________	_________
Total benefit costs divided by net sales
Outsourced functions
Payroll administration	41%	_________	_________
Delivery	12%	_________	_________
Deluxing	5%	_________	_________
Employee benefits administration	12%	_________	_________
Company-offered health plan
Employee pays portion	61%	_________	_________
Employee pays family portion	15%	_________	_________
Employee pays 100%	3%	_________	_________
Company pays 100%	21%	_________	_________
Primary payment plan
Hourly:
Management	3%	_________	_________
Store managers	2%	_________	_________
Veteran salespeople	4%	_________	_________
Inexperienced salespeople	23%	_________	_________
Straight salary only:
Management	34%	_________	_________
Store managers	20%	_________	_________
Veteran salespeople	4%	_________	_________
Inexperienced salespeople	8%	_________	_________
Straight commission only:
Management	5%	_________	_________
Store managers	20%	_________	_________
Veteran salespeople	46%	_________	_________
Inexperienced salespeople	38%	_________	_________
Salary plus commission or bonus:
Management	58%	_________	_________
Store managers	53%	_________	_________
Veteran salespeople	43%	_________	_________
Inexperienced salespeople	25%	__________________

	All stores	Your store 2001 actual	Your store 2002 goals
Sourcing
Number of manufacturers used
Median response
Bedding	2	_________	_________
Master bedroom	5	_________	_________
Youth bedroom	2	_________	_________
Dining room	4	_________	_________
Entertainment centers	3	_________	_________
Desks/home office	3	_________	_________
Occasional tables	5	_________	_________
Upholstery (stationary/motion)	6	_________	_________
Recliners	2	_________	_________
Outdoor furniture	1	_________	_________
Lamps	5	_________	_________
Area rugs	2	_________	_________
Other decorative accessories	10	_________	_________
Stores importing directly	22%	_________	_________
Of those, the percentage that import ...
Dining room/casual dining	55%	_________	_________
Master bedroom	47%	_________	_________
Leather upholstery	45%	_________	_________
Entertainment centers	39%	_________	_________
Occasional tables	37%	_________	_________
Desks/home office	33%	_________	_________
Fabric-covered upholstery	20%	_________	_________
Lamps	18%	_________	_________
Recliners	16%	_________	_________
Youth bedroom	14%	_________	_________
Other decorative accessories	14%	_________	_________
Area rugs	6%	_________	_________
Outdoor furniture	6%	_________	_________

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