3 KPIs Health Food Stores Need to Track to Drive More Business

Running a retail business is no easy feat, especially if your retail business is in the health food store niche. With a growing list of things to do at all times as a natural health store owner or manager, its easy to lose sight of all the numbers and goals that indicate how your business is performing. Tracking and evaluating key performance indicators (KPIs) through your point of sale (POS) system will give your business more insights into how your business is doing overall. Here are three KPIs that health food stores need to track to help drive more business and close more sales:

1. Inventory Turnover

Inventory turnover, also called stock turn, is the measurement of the number of total times a particular product of stock is sold within a given period of time. Calculate it by dividing the cost of goods sold (COGS) during the given period by the average inventory during that period.

In any retail establishment, inventory is one of your biggest investments. Because of this, owners should make sure they aren’t holding too much of it for too long and losing out on profits. Stock turn lets you know if you are selling products quickly enough. This is especially important for health food stores since many products and supplements that sit on your shelves include an expiration date and can’t be sold past that date.

Improve your inventory turnover rate by implementing a system that can properly forecast product demand. An inventory management system with scientific purchasing can help by streamlining operations and improving cash flow by ensuring you have the right products on the shelf at the right time. Additionally, owners can use strategic promotions and marketing tactics to push slower moving products off your shelves faster, boosting your overall turnover rate.

2. Average Transaction Value

Average transaction value is another metric your health food store should be measuring. These KPIs measure the average of how much customers spend on each of their purchases. To calculate, divide the total revenue during a given period of time by the number of transactions in that period. Through this metric, your business can see how much customers are spending and how well your product and pricing strategies are performing.

By creating effective upselling and cross-selling programs you can help increase the check size per customer. Within your health food store be sure to train staff to prompt customers with questions of adding on small items to their order, such as a travel-sized item placed near the cash register. Online, include relevant products on the side or bottom of the screen as customers shop to encourage higher sales.

3. Sales Per Square Foot

Intuitively, sales per square foot is the measurement of the average revenue for every square foot of sales space within your health food store. This does not include storage space, offices, and other non-selling areas of your location.

To calculate the sales per square foot, you will need to divide total in-store sales by the selling area of your store, measured in square feet. Being able to maximize your available space is crucial to make sure that you get the most value from how your store is set up. It’s also a good indicator that lets you know if your current signage and displays are attracting the attention from your customers they deserve.

Here are three tips that you can use to help improve these KPIs:

  • Make sure your store is set up to sell with attractive signage and creative displays
  • Don’t stock items that don’t sell well so you have room for other products
  • Ensure your staff is well educated and properly trained to upsell and cross-sell

Metrics with Meaning

Knowing your data points and what metrics your health food store needs to measure is a key part of running a profitable business. Not only do you need to know these essential data points to help better run your business, but your POS system should be measuring them to make your life easier. Not sure how to get started? Contact us today to discover what retail solutions are right for your health food store.


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