Same-Store Sales Explained

Same-store sales (often called "comps" or "comparable sales") measure revenue growth from stores that have been open for more than a year, stripping out the effect of new store openings. It's the single most important growth metric for retailers and restaurant chains because it isolates underlying unit-level health from expansion-driven revenue. A retailer can grow total revenue by opening new stores; only same-store sales tells you whether the existing stores are getting healthier or weaker.

What it measures

The formula:

Same-Store Sales Growth = (Current Period Sales from Comp Stores − Prior Year Sales from Same Stores) ÷ Prior Year Sales × 100

The "comp base" typically includes stores open at least 12 or 13 months. New openings, recently closed stores, and renovated stores are excluded. This produces a like-for-like comparison.

If $COST reports comparable sales growth of 7% but total revenue growth of 9%, the difference represents new warehouses and FX effects. Same-store sales tells you the existing warehouse base is getting healthier; the gap reveals expansion contribution.

Same-store sales can be decomposed into two drivers:

Same-Store Sales Growth ≈ Traffic Growth + Average Ticket Growth

Traffic growth measures whether more customers are visiting. Average ticket measures whether each customer is spending more. Both matter, and the combination tells very different stories:

• Strong traffic + strong ticket: Premium scenario. Demand is broad-based and customers are engaged.
• Weak traffic + strong ticket: Often inflation-driven. Fewer customers but each spending more, sometimes due to price increases rather than real demand.
• Strong traffic + weak ticket: Customers shopping more but trading down. Common during economic stress or aggressive promotional environments.
• Weak both: Genuine business deterioration.

How to use it in practice

Same-store sales benchmarks vary by retail format:

• Strong-performing concepts (premium, well-positioned): 5%+ comps
• Healthy mature retail: 2-5% comps (roughly inflation plus small unit growth)
• Struggling retail: 0-2% comps
• Declining retail: Negative comps, often persistent

$COST consistently delivers comp sales of 5-8%, exceptional for its scale and one of the cleanest signals of warehouse club model strength. $WMT runs at 3-5% comps in its US business. $TGT has been more volatile, with comps ranging from negative low-single-digits to positive mid-single-digits. $HD comps swing with housing market activity, from 5%+ during boom periods to negative during downturns.

Restaurant chains follow similar patterns. $CMG has historically delivered exceptional comps (often 7-10%+) driven by both traffic and ticket. Premium chains like $LULU show comp performance highly correlated with brand health and product innovation cycles.

The two-year stack metric handles pandemic-era distortions. When 2020 comps were artificially negative (closed stores) and 2021 comps were artificially positive (reopening), comparing 2022 to 2019 (the two-year stack) gives a cleaner picture of underlying trend.

The relationship between same-store sales and total revenue growth reveals expansion strategy:

• Comps significantly below total revenue growth: Heavy reliance on new store openings to drive growth. Sustainable only if new units generate adequate returns.
• Comps significantly above total revenue growth: Slow or no unit expansion, possibly closing stores. Healthy if comp growth is strong; concerning if expansion has stalled.
• Comps roughly matching total revenue growth: Steady-state growth profile, balanced unit expansion and per-unit health.

Common mistakes

Comparing comps across formats without context. A grocer at 5% comps and a fast-casual restaurant at 5% comps mean different things. Grocery has lower price volatility; restaurants have higher operating leverage on traffic.

Ignoring the inflation contribution. In high-inflation periods, much of comp growth can come from price increases rather than real demand. Strip out price to see real comp growth.

Treating one quarter's comps as the trend. Weather, holidays, calendar shifts, and one-time events can move quarterly comps significantly. Look at multi-quarter trends.

ACCE perspective

Same-store sales is not in our standard scoring system because it only applies to a subset of our coverage (retailers and restaurants). For these businesses, we track comp trends in our financial models as the primary leading indicator of business health.

For investors evaluating retail, the combination of consistent positive comps with healthy unit economics is the foundation of quality compounding. Costco's decades of strong comps with disciplined warehouse expansion is the textbook case of how this combination compounds shareholder value reliably.