I am often asked for my thoughts on stock turn benchmarks for a newsagency. The list below is what I use as a guide when assessing a business. While there are some differences between city and country as well as between high street and shopping centre, these numbers are a good guide as to the minimum turn.
- Stationery : 7.0.
- Tobacco : 12.0.
- Gifts: 6.5.
- Plush: 8.0.
- Cards: 3.5.
Stock turn (or inventory turnover as it is known in some places) is a good measure in retail. I find it useful when assessing a business restructure. It guides space and stock investment allocation targeting an overall business goal. It’s a measure that an draw attention to an inefficient department or category of inventory.
The faster you turn stock the better.
It is easy to blame your supplier of under-performing stock or the stock itself. Retailers need to take responsibility in my view and work stock hard with ideal placement, appropriate product adjacencies, good staff training and excellent in-store and external promotion.
Most newsagency businesses I see that are not performing well have a low stock turn. One of the best ways to address this is to order stock using your computer system, based on accurate sales data. Too many newsagents complain that this is too hard. While hard work may be involved initially, this will cost the business less than the poor decisions of not ordering based in reliable business data.
Dead stock costs more than the money spent on the stock. There are space, labour and opportunity costs to consider.
Newsagents can compare their performance through reporting in their newsagency software or they can do a rough manual calculation.