What is Turnover in Retail? Explained

Turnover in the retail industry can refer to two different but related concepts: Employee Turnover: Employee turnover is the rate at which employees leave a company and are replaced by new hires. In retail, where customer service is crucial, managing and minimizing employee turnover is essential to maintaining a knowledgeable and skilled workforce. Inventory Turnover: Inventory turnover is a financial metric that measures how quickly a retailer sells its inventory over a specific period. It is calculated by dividing the cost of goods sold (COGS) by the average inventory. A higher inventory turnover suggests that products are selling quickly, which is generally favorable for cash flow and profitability. Both forms of turnover are critical aspects of retail management, influencing operational efficiency, customer experience, and overall business performance.