Report calls for like-for-like parity
Safeway ‘least conservative’ retailer, says ING
December 11 2002
Supermarket chain Safeway is the least conservative listed retailer when it comes to calculating like-for-like sales, according to research from analysts at ING quoted by the Daily Telegraph.
The report’s author has called for clear guidelines on the calculation of like-for-like sales, which have a strong impact on the way the City judges retail performance.
ING has ranked retailers based on factors such as whether they count extended and refurbished stores in like-for-like calculations, as well as whether existing stores are excluded if a new store has opened in the vicinity.
Other factors such as the inclusion of buy-one-get-one-free promotional items in like-for-like growth figures are also considered. On that basis, ING considers Safeway and Budgens, which in unlisted, to be the least conservative retailers, with bookshop chain Ottakars the most conservative.
John Stevenson, one of the analysts behind the report, suggested the British Retail Consortium issues guidelines on how to calculate like-for-like sales. He told the Daily Telegraph: “Like-for-like sales are the great burning issue and seem to drive share prices on the day of results. They should be a quick acid test to assess the level of underlying sales performance, nothing more and nothing less. To satisfy this definition, they should be as pure as possible in terms of what is defined as sales and which stores are excluded from calculations.”
Safeway chief executive Carlos Criado-Perez recently suggested to the City that their reliance on like-for-like sales, rather than sales per square foot is misplaced.
