A customer browses gift-wrapping supplies a Dollar Tree store in Louisville, Ky.
Same-store sales are critical for retailers, but many investors worry that they will fall in 2022 because 2021—a great year for the industry–gave them a hefty boost. Analysts have increased their estimates for the key metric for only five companies in the past month.
Although definitions vary among companies, same-store sales, or comparable sales, typically measure the change in revenue at stores that have been open more than a year. That is helpful because it shows how existing stores are performing—a company’s sales may go up if it adds new stores, but expansion may not be a positive if customers don’t return over time.
Worries about customers’ willingness to spend are running high at the moment. Many investors are concerned that retailers will struggle to match the big gains in sales they achieved during the pandemic. Consumers are no longer receiving stimulus checks from the government, and their options for enertainment have broadened. Now that people can go to restaurants or see live entertainment, they willl have less money for shopping, the argument goes.
Moreover, the past month has brought a lot of major news. Not only have big retailing names across the spectrum reported results from the crucial holiday quarter, but gasoline prices have soared since Russia invaded Ukraine, crimping consumers’ spending power at a time when inflation is already at decade highs.
So it is no surprise that on average, analysts have taken their same-store sales estimates for the full year lower. The estimate for the industry as a whole, as tracked by