Simply put, “same store sales” (SSS) is a business metric that measures the difference in sales generated by existing locations over a certain period (usually a quarter or year) compared to the identical period in the past.
Knowing same store sales figures is helpful in determining what portion of a company’s (or industry’s) current sales are a result of sales growth in existing locations versus opening new stores. The rule of thumb is that a store has to be operating for a year or more to be considered in the same store sales evaluation. This takes newly opened and closed restaurants out of the equation.
In this way, same store sales is a great indicator of organic growth, especially for restaurants in a larger company, group, or market.
What does same store sales tell you?
Same store sales are expressed as a percentage of improvement, either positive or negative, generally measured quarter by quarter. For instance, if you wanted to determine your same store sales measurement for the fourth quarter of 2017, you would use the following simple calculation:
Divide total dollar amount of sales (Q4 2017) by total dollar amount of sales (Q4 2016).
Subtract 1 from the result.
Multiply that number by 100 and add a ‘%’.
For example, if your Q4 2017 sales are $100,000 and your Q4 2016 sales are $98,000, your same store sales for this quarter are +2.04%.
If this was your restaurant, you would now know that your business is generating a little over two percent more this year than in the same period in the previous year. From there, you can begin to determine why, and look at expanding on those areas that helped produce the bump in sales.
As a metric that most businesses, including restaurants large and small, use, same store sales is also a great measure for determining how your business is performing in comparison to the market as a whole.
If restaurants in your region are down 1% in same store sales, but you’re up 2%, you’re probably doing something right.
What doesn’t same store sales tell you?
Because same store sales is literally a measure of sales, not profit, it can only give you a measure of the money you are bringing in, not what you’re putting out — or the relative difference. It also doesn’t account for across-the-board menu increases or other adjustments that don’t reflect increased traffic or average ticket size.
How are Rewards Network restaurants performing?
In quarter after quarter, restaurants enrolled in either Rewards Network’s financing or marketing programs as a whole outperform the industry average by 3-4%.
For six quarters running, Rewards Network program restaurants have shown positive same store sales, while the restaurant industry as a whole has consistently dropped sales in year to year comparisons.
We deliver new, highly sought-after customers to your restaurant that are otherwise difficult to attract and keep. Motivated by rewards, these loyalty members spend 13% more on average per check than non-members. These are high-income earners making more than $75,000 annually and frequent travelers with disposable funds for great restaurant meals.
And partnering with Rewards Network is the only way you can reach all of these loyalty program members directly.
*TDn2K Black Box Intelligence data collected from nearly 30,000 restaurant units, representing over 170 brands in 50 states and 195 DMAs.
Put our marketing services to work for you.
Partner with Rewards Network for access to our exclusive network of active dining members. Our marketing services expand your restaurant’s reach, increase revenue, and require no new processes or additional training.