Improved store profitability through network and ops optimization
Case study:
Improved store profitability through network and ops optimization
- Situation
- National retailer operated a large, heterogeneous store footprint with significant performance variance across locations
- Core store KPIs including like-for-like growth, staff productivity and net promoter score stagnated while cost inflation eroded profitability
- The recent acquisition of a competitor created urgency to integrate stores and banners, remove overlaps and structurally improve store operations
- Actions
- Established a clear store performance baseline, reflecting catchment area characteristics and local competitive intensity
- Defined store roles and a clustering logic to set distinct economic roles across the footprint
- Assigned every store to a cluster with target P&Ls and benchmark KPIs to make aspiration and performance gaps explicit
- Defined and implemented a cluster-based store operating model integrating organization, staffing, core processes, KPIs and incentives to standardize execution and improve productivity
- Closed overlapping and underperforming stores and resized locations in line with their future role
- Established a store performance management routine with defined KPIs and escalation logic
- Results
- Stabilized store economics through clear store roles, cluster-based targets and standardized store operations
- Reduced the number of stores by 20% while maintaining market coverage
- Improved sales (+5%) and productivity (+15%) while reducing operating costs (-20%), alongside higher customer satisfaction and a +5 percentage point NPS increase