Krista Raymer’s Post

View profile for Krista Raymer, graphic

Driving Cannabis Retail Profitability

Growing unit sales alone isn't enough. A Green Wednesday Review. The results are in... and there is a lot of variation in Green Wednesday's performance. The team at Headset put this chart together. It shows how store management and local market conditions play crucial roles in determining if a store used discounts to drive volume and profit $$$, or if it was an unprofitable promotion day. 📗 Green Zone Demonstrate what you might call the "sweet spot" of retail performance. These stores- grew their profits at a rate of +88.5% while also increasing their units sold by +51.8%. This suggests they likely: + Maintained strong pricing discipline + Implemented strategic rather than blanket promotions + May have successfully upsold customers to premium products 📒 Yellow Zone: Represent stores with balanced but not optimal growth. In these stores, profit growth roughly matched unit sales growth. While this might seem acceptable, it indicates missed opportunities to improve margin dollars while growing volume. 📕 Red Zone: Roughly 25-30% of the stores. These stores showed high unit sales growth but much lower profit growth. This pattern typically indicates aggressive discounting strategies and might be falling into what's known as the "volume trap" - chasing sales at the expense of profitability. What's particularly noteworthy is red stores fall into two main categories: 1. Those showing high unit growth (150-250%) with minimal profit growth (0-25%) 2. Those showing moderate unit growth (50-150%) with negative profit growth (-50% to 0%) These stores are likely caught in a "death spiral" of discounting - where they keep offering deeper discounts to maintain their sales volume, further eroding their profitability.

  • No alternative text description for this image
Elyse Ranger

Driving Cannabis Retail Profitability In-Stores

1w

Love this chart! Shows that heavy discounting doesn't always win.

To view or add a comment, sign in

Explore topics