Like-for-Like Growth
BeginnerLike-for-like growth is the change in sales from a comparable set of operations, such as stores open for the whole of both periods, excluding the effect of new openings, closures or acquisitions.
Like-for-like growth is widely used in retail, hospitality and other businesses with many outlets. Total sales can rise simply because a chain opened more stores. Like-for-like growth strips out these changes to show whether existing locations are selling more.
For example, a retailer might report total sales growth of 10%. But if half of that came from 20 new stores, and stores open for at least a year grew sales by only 2%, the like-for-like growth is 2%. That smaller figure gives a better sense of underlying demand.
Definitions vary between companies. Some include online sales, some exclude stores that were refurbished or temporarily closed, and the rules for when a new store becomes part of the comparison differ. It is therefore important to check how each company defines it.
The same idea is called same-store sales in some countries. It is a key measure that analysts and investors watch to judge the health of a retail business.
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