Role and Importance of GMROF for Retailers

It is calculated by dividing the gross margin by the average stock cost and is used typically within the retail trade. Analyse retailers from a cross-section of retail sectors including supermarkets, department stores, super centres, category killers, hypermarkets, specialty stores, mass merchandisers and Internet retailers. Inventory turnover, or the variety of times inventory is sold over a given interval, affects profitability. Keeping stocks which might be out of date and have a low turnover slows down sales.

  • We expect to file the documents with the Securities and Exchange Board of India by the end of October ’07.
  • BoxFox lets you quickly recover cash for aged stock and instantly put that money toward better promoting products.
  • It also ensures that the required goods are always available for customers.
  • GMROF is expressed as a percentage or a rupees multiple, telling you how much returns you’ve gotten from each piece of full time employee during a specified period.

This means that firm XYZ is selling the merchandise for lower than its acquisition price. In comparison to company XYZ, Company ABC may be a more best funding based on the GMROI. To illustrate the days’ gross sales in stock, let’s assume that within the earlier 12 months an organization had a listing turnover ratio of 9. Now, you’ll be able to calculate the inventory turnover ratio by dividing the price of items sold by average stock.

A planned store layout is not only helpful in optimising the per square foot space of the store, but, also result in enhancing the customer’s in-store experience. The sum of these two amounts equals the total precise value of all purchases and starting stock. Inventory turnover measures a company’s efficiency in managing its inventory of products. Inventory turnover is a ratio displaying how many instances an organization has sold and changed stock during a given interval. A company can then divide the days within the period by the stock turnover method to calculate the days it takes to sell the inventory readily available.

Can a Retail Management Software Help a Salon Increase their Sales?

By FY10, the company aims to open 49 department stores, 20 value retailing stores and 251 specialty-retailing outlets. However, the store roll-out is behind schedule by two-three quarters due to a delay at the real estate developer’s end. To improve gross margin, you have to either increase sales income or cut back the cost of the merchandise. The apparent method to increase sales income is just to extend prices.

Tools such as GMROF is essential for Retailers since this can help them identify the profit generating areas within their Retail stores. Hence, Retailers are now able to make more efficient and planned out decisions regarding the increasing or decreasing allocation of categories within the store. Space productivity is critical for successful retailing and GMROF is the tool that allows Retailers to measure it and make changes accordingly. Shopper’s Stop has entered into a joint venture with the Nuance Group of Switzerland to operate the airport retailing business.

Because of the high stock turns, the investment in inventory is considerably low. Though goods are exempt from import duty, there is lack of clarity on sales tax and service tax. Our two formats gmrof — Stop and Go — are already operational at the Mumbai airport. The accounts turnover ratio is calculated by dividing whole web gross sales by the common accounts receivable steadiness.

Similarly, all have been equally affected by rising rentals, service tax on rentals, rising wage costs and electricity bills. However, we are not signing any property in desperation and are refusing properties with unreasonably high rentals. BoxFox lets you quickly recover cash for aged stock and instantly put that money toward better promoting products. We present a calculator under that helps you apply this to your business.


Analysts divide COGS by common inventory as an alternative of sales for larger accuracy in the inventory turnover calculation as a result of sales include a markup over cost. In both situations, average stock is used to assist take away seasonality effects. Inventory turns measures the variety of instances stock is offered or utilized in a strictly defined time period.

After-Sales / Customer Service Jobs

We already have a presence at the domestic airport in Mumbai with a Crossword store, two apparel and accessories stores and an eatery, which serves Indian dishes. Duty-free retailing involves liquor, tobacco, electronics, gift items, souvenirs, watches, sunglasses and other accessories and food & beverages. Every passenger entering the terminal is a potential customer and conversions are typically higher than in typical mall or market. Consequently, revenues can be upwards of Rs 30-40,000 psf against Rs 10-15,000 psf in a department store.

A firm’s average assortment period is indicative of the effectiveness of its accounts receivable administration practices. Businesses should be able to manage their average assortment period so as to guarantee they operate easily. GMROL stands for Gross Margin Return On Labor – a measure of inventory productivity that expresses the relationship between your gross margin, and the full time employee. Due to technological advancements, the retail owners are conveniently leveraging the advantage of speed to bring products from workhouse to store shelves. As modern retail evolves in India, the opportunity to offer new and better range of merchandise will result in a greater focus on the management of floor space. A product may fetch a low margin in percentage terms from the vendor, but yield high cash margins because of high throughput e.g. mobile phone and accessories.


• Manage the process of plotting the categories based on the store layout and space available in the new, existing and stores under renovation. Coordination with planners to get the in time delivery of ordered goods from vendors and from warehouse to stores. In FY07, the chain level sale per square feet increased 5% from Rs 7,576 psf to Rs 7,973 psf. Customer footfall went up 10% but the conversion ratio remains unchanged at 27%. Calculate the gross margin of the item—or the web sale of goods minus the cost of items bought.

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Delivered highest sales ever for khan market store which was a 6 year old in 2012. Assortment planning for the stores & zone as whole in accordance to the Top line & Bottom line Targets. Merchandise planning of the stores in accordance to the NM% planned. Assortment planning for the stores as whole in accordance to the Top line & Bottom line Targets. TOT decisions with vendors and amendment if required as per business requirements.

With headquarter in Laguna Hills, BatchMaster has its offices in New Jersey, India and New Zealand. This course is designed for retail owners, senior management personnel in retail industry and key decision makers. It is also for senior personnel of general merchandise management, operations management, marketing, finance, human resources and management information system. This tool is also useful for various service providers and vendors to retail industry. Understand the effective way to manage profitability by managing people, space and inventory by using concepts in GMROI, GMROF and GMROL. This framework facilitates better management of retail operations for higher sales and profits.


The gross margin return on funding is an inventory profitability analysis ratio that analyzes a firm’s ability to show inventory into cash above the cost of the stock. It is calculated by dividing the gross margin by the typical inventory value and is used often within the retail industry. GMROI is also called the gross margin return on inventory funding .

Seniority level

To that extent, we might lose market share, but we would rather have sustained profitable growth rather than bad growth. On massive investments by new entrants in the retail sector, we are yet to see it impact on us. We believe that quality of merchandise and customer service will be the key differentiator and determine the footfall. Crossword, Mothercare and the food and beverage brands (Desi café, Brio) will fall under specialty formats. Argos, Time Zone and Nuance joint ventures are the new initiatives taken by the group.

Sanjay Panjwani is the Managing Director at BatchMaster Software, the leading provider of enterprise software solutions for process manufacturing industries. He’s on a mission to solve business challenges through innovation in ERP solution suites. It is the world’s largest manufacturer of moulded furniture and Asia’s largest processor of plastic moulded products.

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In some cases, GMROI is multiplied by a hundred, which with this example would go away GMROI at a price of 166. This formula is often used by retailers to evaluate their inventory inventory and value. A GMROI ratio above 1.00 is a sign that a company is promoting their stock at the next value than it price; and is making revenue on that stock.

Cleanliness of store area to give complete hygiene feel to customer. New product training to store staff to enhance their selling skills. Ensuring minimal store expenses to balance profit & loss statement for a particular store. Finance minister Nirmala Sitharaman said financial market regulators will do what is “appropriate” on matters related to the Adani Group, which has been targeted by short seller Hindenburg Research.

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