Retail Glossary
Plain-English, citation-ready definitions of every retail KPI and metric. Use it as a quick reference, share definitions with your team, or link to specific terms from your own reporting.
Gross Profit
Gross profit is sales revenue minus the cost of goods sold (COGS), measuring profitability before operating expenses.
Gross Margin
Gross margin is gross profit expressed as a percentage of sales revenue.
Markup
Markup is the amount added to cost to set selling price, expressed as a percentage of cost.
Cost of Goods Sold (COGS)
COGS is the landed cost of the products a retailer actually sold during a period.
Net Profit
Net profit is what remains after all costs — COGS, operating expenses, interest and tax — have been subtracted from revenue.
Operating Profit
Operating profit is gross profit minus operating expenses, before interest and tax.
EBITDA
EBITDA is earnings before interest, tax, depreciation and amortisation — a cash-style profit measure used to compare retail businesses.
Waste
Waste is the value of stock thrown away, written off or expired, expressed in dollars or as a percentage of sales.
Shrinkage (Shrink)
Shrink is inventory loss from theft, administrative error, supplier fraud and unrecorded damage — the difference between book stock and counted stock.
Inventory Turn
Inventory turn (turnover) is how many times average stock is sold and replaced in a year.
Days on Hand
Days on hand is how many days of sales the current stock represents at the current sell-through rate.
GMROI
GMROI (Gross Margin Return on Investment) measures gross margin dollars earned per dollar of inventory investment.
Contribution Margin
Contribution margin is the share of sales remaining after variable costs, available to cover fixed costs and profit.
Food Cost
Food cost is the cost of ingredients as a percentage of the menu or retail selling price.
Labour Cost %
Labour cost percentage is total labour cost (wages, on-costs, benefits) as a percentage of sales.
Sales per Labour Hour (SPLH)
SPLH measures the sales revenue generated per worked labour hour.
Average Basket
Average basket is total sales divided by number of transactions — what the average customer spends per visit.
Units Per Transaction (UPT)
Units per transaction is the average number of items per sale.
Conversion Rate
Conversion rate is the percentage of store visitors who make a purchase.
Sales per Square Foot
Sales per square foot measures revenue density — sales divided by sales-floor area.
Break-even Point
Break-even is the sales level at which total revenue equals total costs — zero profit, zero loss.
Stock Turn
Stock turn is the same as inventory turn — how many times stock is sold and replenished in a year.
Open-to-Buy (OTB)
Open-to-buy is the budgeted dollar amount a buyer can still spend on new stock in a period.
Sell-Through Rate
Sell-through is the percentage of received stock that has been sold over a given period.
Average Inventory
Average inventory is the mean stock level held during a period, used in turn and GMROI calculations.
Comparable (Like-for-Like) Sales
Comp sales are sales from stores open for at least 12 months, used to measure organic growth.
Footfall (Traffic)
Footfall is the number of people entering the store in a period, measured by door counters.
Markdown
A markdown is a permanent reduction to the selling price of stock to clear it.
Wage Cost
Wage cost is total labour spend including base pay, overtime, on-costs and benefits.
Recipe Yield
Recipe yield is the usable output from a recipe after trim, evaporation, cooking loss and waste.