Knowing a couple of quick headline numbers can help you quickly gauge performance of your stores over time. A quick glance at these numbers will tell you if you’re doing better or worse than last week/month/year.

So what are the KPIs for the retail industry? These are the numbers you need to know:

  • conversion rate
  • average transaction value and
  • labour cost to sales

Why are these 3 so important for any retail franchisee to know?


Conversion rate

This is the number of ‘browsers’ that your staff convert to sales. It’s simply the number of transactions you put through your Point of Sale (POS) as a percentage of the people who have walked through the front door – or, transactions divided by footfall.

For example; I pull a report from my POS that says I did 30 transactions in the last hour. My door counter counted 100 people walking through the front door. This is a conversion rate of 30%.

Increase your conversion rate and you can grow sales immediately. You can impact this number simply by having staff approach customers more often, to take notice of what they’re looking at and to ask open questions about their needs like, “What are you working on at the moment?” or “Is this your first visit to our store?” (Thanks to for the dynamite ‘alternatives to “can I help you?” in retail!)


Average transaction value

Important in any type of business, average transaction value tells you what the average size of your sales are. It’s simply your total sales figure for the day/week/month/year divided by the number of sales.

You can grow this number through upsell which is one of the most efficient ways to have your staff boost your sales.


Labor cost to sales

Labour cost to sales, or labour cost percentage, is the cost of your sales staff for the hour/day/week/month divided by the sales for that period.

For example; $1000 in sales between 10am and 11am with a labour cost of $250 is a 25% labour cost %.

Ever walked into a shop and there’s staff standing around talking? That’s over-staffing. It doesn’t matter how high your conversion rate is, or how big your average transaction value is – if you’re over-staffing, you’re losing money. The quickest way to resolve this is get a report of daily sales by hour from your point of sale, and start matching your staffing numbers with the busiest (highest sales) times.


So we’ve answered the question: what are the KPIs for the retail industry? There’s three actions you can take to make a big difference to your business right now.

  • Train your staff to ask better questions and approach more customers.
  • Invest in up-sell, both at-counter and via training staff. It’s the quickest way to grow your ATV
  • Match your staffing levels to sales demand by pulling hourly reports from POS

Want more? Visit our course page and pop in your email address to be notified when our franchisee training course goes live! One of the modules in this course covers calculating and interpreting retail KPIs in detail.

Good luck!