Same-Store Sales and Unit Economics in Consumer PE Interviews

Consumer and retail diligence lives in unit economics. If you only recite consolidated revenue growth, interviewers will ask whether growth is more stores or better stores. Same-store sales (SSS / comps) and 4-wall contribution are the language. Mastering this split is how you sound like you have read a store P&L, not only a CIM cover.

The short answer

"Same-store sales measure growth from locations open in both periods, stripping out new unit openings. That tells you whether the core fleet is healthier. Unit economics look at revenue, contribution margin, and payback at the store or cohort level so you know if new units deserve capital."

Same-store sales

SSS Growth ≈ Growth in sales for stores open in both periods
(definitions vary: weeks open thresholds, reopenings, renovations)

Why it matters:

• Consolidated growth can be all new stores while comps are negative
• Negative comps with rising labor and rent crush margins
• Pricing vs traffic mix explains "good" vs "bad" SSS

Ask how the company defines the comps base. Renovations, COVID reopenings, and temporary closures create definition fights. In interviews, flag the definition, then move to traffic versus ticket.

Traffic-driven comps with stable ticket often look healthier than ticket-driven comps with soft visits, especially if wage and commodity inflation already used up pricing room.

4-wall / contribution frame

Be explicit that "contribution" and "4-wall" are not universal GAAP lines. What matters is whether new stores clear a cash-on-cash hurdle after rent and labor, and whether corporate overhead scales or stays fixed as the fleet grows.

New unit diligence questions

A roll-up that looks cheap on EV/EBITDA can still destroy value if new units never reach mature 4-wall and cannibalize comps.

Worked intuition

Company opens 20% more stores. Revenue +18%, SSS −2%.

Story: expansion, not fleet health. The PE model must not assume mature margins on day-one new stores. Cohort the openings: Year 0 loss or thin contribution, Year 1-2 ramp, mature Year 3+. If the CIM applies mature margins to every new door in Year 1, haircut it.

Links to modeling

• Cohort ramps in the operating case
• Maintenance CapEx vs growth CapEx
• Working capital for inventory turns
• Rent escalators and percentage rent in the 4-wall

Negative comps plus rising occupancy is a margin trap even when total EBITDA rises from openings. Watch the bridge from store contribution to corporate EBITDA.

Compare: system growth vs comps

Labor, occupancy, and the margin sandwich

Even with flat comps, 4-wall can compress. Labor hours per transaction, wage rates, and occupancy (fixed rent plus percentage rent) often rise faster than ticket. Interviewers like a simple sandwich:

• Top: SSS bridge (traffic, ticket, mix)
• Middle: contribution after COGS and store labor
• Bottom: 4-wall after rent, then corporate EBITDA

If contribution holds but 4-wall falls, the issue is occupancy or occupancy mix (new stores in expensive A sites). If contribution falls with positive SSS, labor or COGS inflation is eating price. Narrating that sandwich beats saying margins are under pressure.

Delivery and marketplace channels add another layer: higher sales with lower contribution if fees and labor for fulfillment sit in the store P&L. Ask where those costs live before you celebrate digital growth.

CapEx and payback honesty

Growth CapEx is not only the build-out check. Include pre-opening labor, initial inventory, landlord incentives netted correctly, and working capital to stabilize the unit. Payback should use cash contribution after rent, not deck-level EBITDA that already loads corporate allocations inconsistently. If payback only works by assuming no cannibalization and peak-site productivity forever, the unit economics are fragile.

Interview verbal

"I separate system growth from same-store growth. Then I diligence store contribution, rent, labor, and payback on new units. Consolidated EBITDA can hide a weak core fleet funded by openings. I want traffic versus ticket inside SSS, and year-1 versus mature economics on the growth CapEx."

Follow-ups

1. What payback do you need to keep opening stores?
2. How much of SSS is price versus traffic?
3. What happens to comps if you slow openings (cannibalization relief)?
4. Are delivery / marketplace fees inside or outside 4-wall?

Related

Operating Diligence KPIs and PE Case Studies. Practice a consumer thesis on Project Falconcrest.