Case study 09 / Financial modelling / Retail economics

ABCOFFEE Unit Economics

Independent financial model

Understand the economics before expanding the footprint.

A profitability model comparing store formats and the operating assumptions behind expansion decisions.

Editorial illustration of the project’s focus.

01 / Context

The problem

A retail expansion plan needs to show how pricing, volume, rent, delivery and promotions translate into store-level contribution.

02 / Ownership

My contribution

Store-format economics, operating-driver modelling, sensitivity analysis and break-even scenario comparison.

The model’s operating drivers

Average order value and pricing.
Rent, delivery and promotional costs.
Daily volume and store-format economics.

The expansion decision

Compare the assumptions under which each format can cover its operating costs. Sensitivity analysis makes the dependence on volume and unit contribution visible before committing to a larger footprint.

Model outputs / Assumptions apply

What the model explores

Modelled break-even cups per day: ≈78 / ≈42
Standalone versus store-in-store, with 26 operating days per month and the workbook’s cost and contribution assumptions.
Lower modelled volume threshold: 46.2%
Relative difference between the two break-even thresholds. A comparison of store-format scenarios, not measured operational improvement.
Annualised high-volume scenario: ≈₹11.11 lakh
Store-in-store operating profit at 70 cups per day, annualised from the model’s monthly scenario. Not verified outlet profit.

The idea to carry forward

Expansion decisions should be made with a clear view of store-level contribution and operating constraints.

Independent financial model. Break-even and profit scenarios are not verified ABCOFFEE outlet financial results.