Woolworth’s

"Retailing is a very simple business and only five things (key ratios) matter: Sales obviously, but the percentage increase on the previous year tells you if the business is growing and is almost more important than the actual sales level. Gross margin is the biggest factor in determining profitability and tells you the percentage profit on goods sold. Cost to sell is the staff wages as a percentage of sales and needs to be carefully managed every week. Shrinkage is the amount of stock losses and Woolworth’s taught us the importance of managing that. Overheads and, in particular, the cost of central distribution can become uneconomic and kill a business."

"Retailing is a very simple business and only five things (key ratios) matter: Sales obviously, but the percentage increase on the previous year tells you if the business is growing and is almost more important than the actual sales level. Gross margin is the biggest factor in determining profitability and tells you the percentage profit on goods sold. Cost to sell is the staff wages as a percentage of sales and needs to be carefully managed every week. Shrinkage is the amount of stock losses and Woolworth’s taught us the importance of managing that. Overheads and, in particular, the cost of central distribution can become uneconomic and kill a business."