Term: ANNUAL SALES CHANGE

The percentage change in sales (turnover) between the most recently reported financial year and the preceding. You should note that unless the increase in sales is more than the going inflation rate the company’s sales are actually declining. The sales or turnover figure can also be broken down into those sales which are from the company’s normal business and those which arise from things like rentals, interest and royalties earned. Most companies will increase their prices every year by the inflation rate – unless the industry they are in is very competitive and allows them no pricing power. Supermarket chains like Pick ‘n Pay or Shoprite often make less than a 3% margin on their turnover – so their objective is to try to maximise turnover by stealing market share from competitors and by continuously opening new branches both inside South Africa and elsewhere.

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