Utilizing Information in ABACUS Store Reports

March 26, 2008

By David Walker, ABA Industry Consultant

Why should booksellers participate in the 2008 ABACUS Survey? This first in a series of articles explains how participants can use the information in their individual ABACUS reports to help their bookstores become more profitable. Booksellers who have never participated in the ABACUS Survey can follow along using a sample report on BookWeb.org. (The sample's "average" figures reflect actual 2006 ABACUS survey results; however, the individual bookstore's figures are for illustration purposes only and do not represent the results of an actual store.)

An individual ABACUS store report encompasses 24 pages of analysis, including overall survey results, an executive summary of key findings, and comparisons of the store's results with those of other stores based on multiple criteria -- such as store size, sales level, and type of market -- as well as year-to-year trends for stores that have participated in previous ABACUS surveys. How do you begin to make sense of all this information?

First, print out the report and read it through before deciding where to focus your attention. (Although some parts of the report, such as charts and graphs, are in color, it is designed to be equally legible in black and white.)

The first few pages of the report contain the Executive Summary of key findings, as well as the overall survey results. Overall results are useful for understanding industry trends and are the most statistically reliable benchmarks, since they include data from all of the stores in the survey.

If you've participated in previous ABACUS surveys, begin your analysis of your store's individual results with the year-to-year comparisons. It's worth spending some time here. Trends serve as an early warning system and help you identify specific areas where you need to do better -- it's not enough to just look at the bottom line. For example, although our fictitious sample store increased its net income each year, Gross Profit slipped from 2003 to 2004 and Compensation and Occupancy Expense both increased. Being able to see those trends enabled the store to make adjustments to improve its results the following year.

The comparison of your year-to-year numbers with those of the entire survey group allows you to see whether a trend is peculiar to your store and could indicate a problem (for example, if your gross profit margin is flat while the industry trend is up).

Comparisons by specific criteria begin with the survey results broken down by sales level. Your store's data appears in the left column, the average results for the category that your store falls into are highlighted, and your store's variations from the averages for that category appear in the right column. This system is followed throughout the report.

When comparing your results with those of other stores, it's important to keep in mind a couple of points:

• Your store is unique, so it is unlikely that any one group of stores will exactly match yours (which is why the report has comparisons based on different criteria). The purpose of the ABACUS survey is to provide benchmarks and serve as a roadmap to help you improve your business; it is not intended to be a template into which every bookstore should try to fit.
  
  
• Just because some of your numbers are different than the average for comparable stores doesn't necessarily mean that your store is performing poorly in those areas -- it may simply reflect a difference in your business model or strategy. For example, while our fictitious store's operating expenses are generally lower than those of other stores in the same sales category, it is spending significantly more on advertising and promotion. This may be due to poor management of co-op funds (in which case it's a problem that should be addressed), or it may be a deliberate business strategy.

The important thing is to determine why there is a variance between your numbers and the results for comparable stores. Then decide whether it's an area that should be improved and how you can make improvements. How? That will be the subject of our next article (so don't throw away that sample report just yet!)

Submit your 2007 financial data to the 2008 ABACUS Survey now. It takes about an hour, and the benefits include an individual store report and a $50 rebate. Learn more.

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