Retailers Must Prioritize In-Store Efficiency to Maximize Profits, According to MerchLogix Report

Inflationary wage pressures and slowing macro trends are putting pressure on retailers' profitability, making it crucial for retailers to focus on store-level efficiencies.

MerchLogix research report

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MerchLogix™, a leading provider of space planning and merchandise operations software, and DM Buck Advisory, a research and financial consultancy, today released a research report entitled "Red Dawn at Morning: An Update on the Retail Opportunity." (LINK) The study, which updates a 2021 report commissioned by MerchLogix, analyzes trends in retail profitability, stock market sentiment and the impact of store-level efficiency on operating margins. The new report draws on an analysis of financial filings from leading publicly traded retailers from 2018 to 2022.

Key takeaways from the report include:

  • Many retailers continue to invest in growing their store fleets, with 8 out of 12 retail categories showing net new store growth.
  • Despite concerns about online competition, investor sentiment towards brick-and-mortar stores has stabilized, and the retail sector is performing in line with the broader market.
  • Retail success depends on a relentless focus on cost efficiency, with store-level efficiency playing a crucial role in driving operating margins.

"Our research shows that in the past two years, aggregate store growth has returned among major retailers," said David Magee, ASA, CFA, of DM Buck. "Investors seem to understand the primacy of physical stores within the competitive construct of most retail environments. At the same time, it's apparent that management teams must better embrace new tools and methods to reverse the recent slide in retail EBIT profitability."

"Control of store space is essential for retailers' bottom line performance, especially in the face of rising labor costs and other economic pressures," said Nick Downey, CEO of Merchlogix. "Even modest improvements in store-level efficiency can significantly impact operating margins. Our report highlights the ongoing need for new methods and tools to drive retail profitability."

The full report is available on the MerchLogix website.

About DM Buck

DM Buck Advisory assists small and medium-sized business owners in making knowledge-based decisions concerning their future. Our services include market research, business appraisals, exit strategizing, and sophisticated financial modeling.

About MerchLogix

MerchLogix offers retail merchandising software solutions designed to make sure merchandising strategies become in-store execution - from space and floor planning to the planogram to shelf placement. Our solutions are trusted by some of the biggest names in retail. They are cloud-based, and we don't charge by the user, which means anyone can be granted access to your merchandising plans anywhere, anytime, at no extra cost. MerchLogix is headquartered in Atlanta. For more information, visit

MerchLogix is a trademark of MerchLogix, Inc.

Contact Information:
Judy Anderson
[email protected]

Original Source: Retailers Must Prioritize In-Store Efficiency to Maximize Profits, According to MerchLogix Report

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