Annual P&L Study 2020 - Best Practices

Annual P&L Study 2020 - Best Practices

by Tim Quebedeaux

Inventory turns, GMROII and the Best Practices Group all go together like rice and Gumbo!  You hit your goals for those first two, you are almost always in the last one.  The largest Best Practices group in the P&L Study history with 44 Garden Centers increased their Inventory Turns and GMROII, but was it what we thought it would be? We will visit this topic during The Fall Event 2021 in Wilmington!


Best Practices Group, 2020 P&L Study

Atlantic Nursery
Bedner's Farm & Greenhouse
Berns Garden Center Beavercreek
Berns Garden Center Middletown
Bloom Greenhouse & Garden Centre
Bountiful Acres
Buchanan's Native Plants
Civano Nursery
Del's Garden Center
Dothan Nurseries
Ellis Home & Garden, Bossier
Ellis Home & Garden, Longview
Fairview Greenhouses
FarWest Landscape & Garden Center
Fernwood Garden Center
Fiddleheads Garden Center
Four Seasons Greenhouse & Nursery
Gateway Garden Center
Gill Garden Center & Landscape Co.
Hoerr Nursery
Hunters Garden Centre - Vancouver
Hunters Garden Centre - Surrey
Jericho Nursery
Kennedy's Country Gardens
Kerby's Nursery & Landscaping
Magnolia Garden Center
Meadows Farms / 7 Corners-Falls Church
Meadows Farms / GBG-Richmond
Meadows Farms / Leesville
Mostardi Nursery
My Secret Garden
Natorp Nursery Outlet
Plants for All Seasons
Rhoads Garden Center
Rolling Green Nursery
Sandy's Back Porch Garden Center
Shonnard's, Inc.
Skinner Garden Store
South Pleasantburg Nursery
Sunnypoint Gardens
Terra Gardens Nursery & Bark
Watters Garden Center
White Oak Gardens

The next part of the P&L Study covers Inventory Turns and GMROII, the ultimate report cards for your inventory management.  Inventory Turns are calculated by taking COGS and dividing it by Average Inventory.  This measurement speaks directly to how fresh your inventory is, which in turn will increase/decrease your margin and your customers repeated visits.  Higher Inventory Turns will benefit your cash flow situation as there will be more cash in the bank and less tied up in older inventory on the sales floor.  Your Goal for Inventory Turns will vary widely by category due to the perishability of your product.  Inventory Turn expectations are lower for non-perishable products, because of the perception that they can sit for longer periods of time without losing value.  This is not true, the older and greater the amount you have not turning, the more you end up paying the carrying cost.

Gross Margin Return on Inventory Investment - GMROII, puts Inventory Turns and Margin Dollars together for one of the most essential measurements.  This is calculated by taking Margin dollars divided by average inventory (the Inventory Turns part of the equation).  Essentially saying, how many margin dollars do I get for every dollar invested in average inventory.  As we always say, Margin Dollars are important, as they pay the bills, but for GMROII Inventory turns are more important, as they account for 2/3rds of the equation.  As you increase your Turns, you will increase your margin dollars, a profitable snowball effect!

What we saw in 2020, was increasing GMORII and Inventory turns, but not in the manner in which we thought they should go. Expect further discussion on that topic and more during the Fall Event in Wilmington.

Next week we will reveal the Best of the Best Group, as well as the end of the line with the P&L Study - the balance sheet!  Your business’s ultimate report card.

Got questions or need more information about The Group's the Weekly Department Review (WDR) or Annual P&L Study? Give Tim or Steve a call or email.

Tim Quebedeaux
Cell: 770.355.6249

Steve Bailey
Cell: 618.521.5225


Tim Quebedeaux and Steve Bailey with RetailKPI Consulting are service providers for The Garden Center Group and manages all Group financial sharing programs. The Weekly Department Review (WDR) and The Annual P&L Study are industry exclusives developed by The Garden Center Group and are included in your retainer!

REMEMBER: Your interaction (by phone and email) with Group Service Providers such as Tim Quebedeaux, Steve Bailey, Robert Hendrickson, Sid Raisch, Jean Seawright, and John Kennedy are included in your retainer! So what are you waiting for? Take advantage of all that The Group has to offer and give them a call or send an email now!

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