What it means
When running a growing business, looking only at total revenue can hide important truths. If your total sales increased by twenty percent this year, you might feel successful.
However, if you opened five new shops during that same period, the growth might simply be due to having more locations rather than doing better in the places you already operate. Like-for-like sales, sometimes called same-store sales, solves this problem by isolating older, established units.
This metric matters because it cuts through the noise of expansion. It tells you whether your existing customer base is buying more, if your marketing is working, and how well you are competing against local rivals on familiar ground.
Business owners and investors rely on this figure to gauge the genuine health and momentum of a retail or service chain without the distortion of rapid footprint changes. In practice, you calculate this by taking a specific set of locations that were open during both comparison periods, usually this year and last year, and looking only at their combined revenue.
Any shop that opened or closed during the timeline is left out of the calculation. This gives managers a fair baseline to spot operational trends, pricing pressures, or shifts in consumer demand.
Tracking this indicator helps you separate the skill of your core operations from the brute force of opening new sites. If your like-for-like sales are dropping while total revenue rises, it is a clear warning sign that your core business is weakening beneath the expansion.
In practice
Real-world examples.
Example
Coffee chain BeanStreet opened three new cafes this year. Total revenue jumped by 30 percent, but like-for-like sales for their ten original cafes rose by just 2 percent, showing sluggish core growth.
Example
Local bakery chain Crusts closed one underperforming branch. Total revenue fell by 10 percent, but like-for-like sales across the remaining four shops actually increased by 5 percent due to higher footfall.
Example
Boutique fitness brand FitPod expanded online classes. Total revenue doubled, but like-for-like sales for physical studio memberships stayed flat, proving the new digital stream drove all the growth.
Think of it
“Imagine tracking your personal fitness by weighing yourself while carrying a heavy backpack. To know if you are truly gaining muscle, you must take the backpack off. Like-for-like sales take off the backpack of new store openings to show your true core shape.
Formula
Calculation
Formula: ((Current Period Revenue of Established Units - Prior Period Revenue of Established Units) / Prior Period Revenue of Established Units) * 100
Example: Last year, your five original shops generated 500,000 pounds. This year, those exact same five shops generated 535,000 pounds.
Calculation: ((535,000 - 500,000) / 500,000) * 100
= (35,000 / 500,000) * 100
= 0.07 * 100
= 7 percent growth.Case study
Seen in the real world.
GreenLeaf Grocers operated six neighborhood supermarkets last year, generating a combined revenue of 6 million pounds. Eager to expand, the company launched two new large stores mid-year, pushing total company revenue up to 7.8 million pounds by year-end.
The board of directors was initially thrilled with the 30 percent jump in total turnover. However, the finance director decided to run a like-for-like sales analysis to see how the original six shops performed without the boost from the two new branches.
By isolating the data for the original six supermarkets, the finance team discovered those locations generated 6.12 million pounds in the current year. Applying the formula revealed a modest like-for-like growth rate of 2 percent. Furthermore, inflation and rising supplier costs meant that transaction volumes had actually dropped slightly in the established stores, even though money taken at the tills was marginally higher.
This insight changed the strategic direction. Instead of rushing to open a ninth store, management shifted focus to improving customer experience and stock management in the existing six branches, protecting profitability where it mattered most.
Watch out
Common mistakes.
- Including new stores that opened partway through the year in the comparison.
- Failing to adjust for the calendar shift when holidays or weekends fall on different dates.
- Ignoring the impact of temporary store closures for refurbishment, which skews the baseline.
Questions
People also ask.
Why do we exclude new stores from this metric?
New stores naturally experience a surge in early customer curiosity. Excluding them prevents this temporary boost from masking underlying issues in your older, established locations.
How often should I calculate like-for-like sales?
Most businesses review this metric on a monthly, quarterly, and annual basis to spot trends and seasonal shifts in consumer behavior.
Does this metric apply to businesses other than retail?
Yes. Any business with multiple operating units, such as dental practices, gyms, or restaurants, can use this metric to track established location performance.
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