The Gap

What is the Gap?

The Gap shows the amount of additional profit your company would realize each year if the target department performed at benchmark levels. It presents your company’s performance formatted to allow easy comparison with data from the top quartile of comparison stores (similar-size peers).

What can I learn from my company's Gap?

The Gap provides an interactive mechanism to construct a mini business plan for each department using comparative data from the CoopMetrics database.

How does the Gap work?

The Gap allows you to calculate the impact of specific changes on key variables in a department’s operations (such as margin, labor productivity, growth rate, and inventory turns) on the department’s overall financial performance. The tool makes information on the best performing companies available in these key variables and allows you to see the impact on your bottom line.

• The benchmark is established by the performance of the company at the 75th percentile performance level. 

• If there are not at least eight stores in the same size category as your company reporting on a key variable, the benchmark is the average of the top quartile for all stores (regardless of size). 

• The “Our Plans” section allows you to create scenarios and view the dollar impact of each plan. Enter data in this section to the right of the black line to see how the changes affect your company’s performance.

• The Gap is color-coded to help you focus on the important performance areas. Cells in aqua are the four main “business drivers” that can be changed in the “Our Plans” section. Margin minus labor is highlighted in yellow and inventory turns appears in green. Red cells indicate that the margin minus labor is above the upper quartile.

• For more specific information on how to use the Gap, see the “Instructions” worksheet inthe Gap spreadsheet.

Click here for Tips and Hints for using the Gap tool.