The situation
The management team of a £5m turnover retail business wanted to increase their profitability to enable them to further invest in the business.
What we did
- Introduced product cost cards for each product, gaining a detailed understanding of gross profit by product
- Benchmarked the sales price of similar products at our competitors
- Reviewed the value proposition of our products against the competitor products
- Reviewed the promotions and reduced the discounts being offered
- Increased the sales price of a number of product categories after modelling the likely volume impact
The outcome
In the first year, we increase profitability by over £200k or 4% of turnover after accounting for volume drop. This benefit re-occurred in future years. The management team were delighted and were able to invest the additional profits in growth.
