Unraveling the Meaning of Like for Like: A Comprehensive Guide for Businesses

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Unraveling the Meaning of Like for Like: A Comprehensive Guide for Businesses

Meaning of Like for Like:
Like for like is a business term used to compare the performance of a company or its products over time, excluding the impact of factors such as store openings or closures, changes in accounting practices, or acquisitions. By isolating the performance of existing stores or products, like-for-like comparisons provide a more accurate measure of underlying trends and growth.

Measuring Like-for-Like Performance

Method	Description	Advantages	Disadvantages
Same-store Sales (SSS)	Tracks sales of stores that have been open for at least a year	Easy to implement, provides a direct comparison	Excludes new stores and may not reflect overall company performance
Rolling Average	Compares a store's sales to its average sales over a specified period	Reduces seasonal fluctuations, provides a more stable comparison	Requires historical data
Weighted Average	Gives greater weight to sales of larger stores	Provides a more comprehensive comparison, accounts for store size	Can be complex to calculate

Applications of Like-for-Like Analysis

Purpose	Benefits	Examples
Performance Evaluation	Assess the effectiveness of marketing campaigns, product launches, and store operations	Tracking sales growth, comparing store performance
Trend Analysis	Identify industry trends and economic factors affecting demand	Monitoring consumer spending patterns, predicting future performance
Valuation	Determine the value of a business or its assets	Valuing retail chains, estimating business earnings

Success Stories

Starbucks: Like-for-like sales increased by 9% in 2021, driven by strong mobile ordering and a shift towards drive-thru operations. Source: Starbucks Annual Report 2021

Amazon: Like-for-like sales grew by 28% in the third quarter of 2022, boosted by Prime Day promotions and continued e-commerce growth. Source: Amazon Q3 2022 Earnings Report

Zara: Like-for-like sales rose by 17% in 2022, as the fashion retailer benefited from strong demand for its fast-fashion products. Source: Inditex Annual Report 2022

meaning of like for like