What it means
Total revenue growth in a chain blends two very different things: existing locations trading better, and new locations being added. Same store sales growth, often called comparable sales or like for like sales, isolates the first by looking only at sites that traded in both the current and the prior period.
The distinction matters because opening stores is a decision management can make at will, while persuading existing customers to visit more often or spend more is genuinely hard. A chain can post 20% total growth and still be in trouble if its established sites are shrinking, and investors will always look past the headline to find this figure.
Defining the comparable base is the whole game. Most operators include a site once it has been trading for twelve or thirteen full months, exclude sites that were closed for refurbishment beyond a set number of days, and disclose exactly which convention they use so the number can be trusted across periods.
The figure is usually broken into two drivers: transaction count and average transaction value. Growth built on more customers is generally healthier than growth built purely on higher prices, because price led growth can quietly mask a falling number of visits.
Online and delivery channels are the modern complication. Where an order is placed on an app but fulfilled from a specific site, operators must decide whether it belongs in that site's comparable sales, and different companies answer that differently, which makes cross company comparison less reliable than it looks.
In practice
Real-world examples.
Example
A supermarket group reports same store sales growth of 1.2% while food price inflation ran near 5%. Analysts conclude that shoppers bought noticeably less volume, and the share price falls despite total revenue rising on the back of eight new stores.
Example
A gym operator excludes two clubs from its comparable base because they were closed for eleven weeks of refurbishment. It discloses the exclusion clearly in the results statement, and separately reports that the refurbished clubs traded 18% ahead on reopening.
Example
A fast food franchisor uses same store sales growth to set franchisee support priorities. Sites growing below 2% receive an operations review, and the exercise reveals that under performance clusters around locations with drive through queue times over four minutes.
Think of it
“Same store sales shows how your existing stores are performing-growth without counting new locations.
Formula
Calculation
Same store sales growth = (comparable period sales - prior period comparable sales) / prior period comparable sales x 100, counting only locations open through both periods.
A coffee chain ends the year with 50 shops, of which 40 have been open for more than twelve months. Those 40 shops generated $52,000,000 this year against $50,000,000 last year, so same store sales growth = ($52,000,000 - $50,000,000) / $50,000,000 x 100 = $2,000,000 / $50,000,000 x 100 = 4.0%.
Total sales, including $9,000,000 from the ten new shops, were $61,000,000 against $50,000,000, which is growth of ($61,000,000 - $50,000,000) / $50,000,000 = 22.0%. The gap between 22% and 4% is the honest story: most of the growth was bought with new leases and fit out capital, not earned from the existing estate. Splitting the 4% further, transactions rose about 1% and average spend about 3%, and 1.01 x 1.03 = 1.0403, confirming the roughly 4% outcome.Case study
Seen in the real world.
The following case is illustrative and entirely fictional. Rowanmill Bakery, an invented chain of high street bakeries, expanded from 40 to 50 shops in a single year and announced total sales growth of 22%. The founder framed the year as a triumph in the annual review.
The finance team, preparing for a funding round, calculated same store sales growth properly for the first time and found 4.0% against food inflation running higher than that. In real terms the original 40 shops were selling slightly less than the year before, and three of them had gone backwards by more than 10% after a competitor opened nearby.
Rowanmill's fictional board paused the opening plan for two quarters and redirected the capital into refurbishing the weakest ten shops and reworking the lunchtime range. The following year total growth was a more modest 9%, but same store sales growth reached 7%, and the funding round was completed on far better terms because the growth was visibly earned rather than bought.
Watch out
Common mistakes.
- Quoting total revenue growth and calling it same store growth, which flatters any business in an opening programme.
- Changing the definition of the comparable base between periods without disclosing it, so an improvement is really just a change in counting.
- Celebrating positive growth without checking it against inflation, when a 2% rise in a year of 5% price rises means real volumes fell.
Questions
People also ask.
Does same store sales growth include online orders?
It depends on the company's stated policy, so always read the definition given in the results before comparing two chains.
When does a new site enter the comparable base?
Most operators bring a site in after twelve or thirteen full months of trading, once it has lapped its opening surge.
Why do investors care so much about this number?
Because it is the cleanest available measure of whether the underlying business is winning customers, separate from the capital being spent on new locations.
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