Castrelle Fashion reports revenue growth of 18%. New stores add 12 points, same-store footfall is down 2% and the average bill is up 8%. Break the growth down and say what it tells you about demand.

Same-store revenue grew about 5.8%, all of it from a bigger average bill, while 2% fewer customers came through the door. New stores supplied 12 of the 17.8 points. The headline is mostly expansion, and demand measured in bills is shrinking. Whether that worries you depends on how much of the 8% bill rise is price increases rather than customers buying more.

Picture a tea stall owner who opens a second stall and reports takings up 60%. Before congratulating him you would ask how the first stall did. Retail growth has two sources that mean different things: new space, which is bought with capital, and same-store sales, which shows whether customers want more of what the existing stores sell. Analysts call the second same-store sales growthRevenue growth counted only in stores open for the whole of both periods, so opening new stores cannot flatter it.. Castrelle's new stores added Rs 120 crore, 12 of the 17.8 points.

Same-store revenue is the number of bills times the average bill, so the two changes multiply rather than add. 0.98 times 1.08 is 1.0584: same-store revenue grew 5.84%, slightly less than the 6% you get by adding minus 2 and plus 8. In rupees, 2% fewer bills costs Rs 20 crore on last year's Rs 1,000 crore, and the 8% bigger bill adds Rs 78.4 crore on the smaller base of Rs 980 crore. Same stores end at Rs 1,058.4 crore; add the new stores and you reach Rs 1,178.4 crore.

Fewer customers each paying more is the pattern of a brand pushing price, not one gaining followers. Demand measured in people is falling; revenue measured in rupees is rising only because each remaining customer pays more. That can work for a while if the brand has pricing power, but a price-led same-store number usually has a ceiling: at some point the next price rise costs more bills than it gains in rupees, and same-store growth turns negative quickly.

Your next questions separate the stories. How much of the 8% is like-for-like price increases, and how much is customers buying more items per bill or a richer mix? Did new stores open near old ones and take part of their footfall, which is cannibalisationWhen a company’s new outlet or product takes sales from its own existing ones, so total growth is smaller than the new outlet’s sales suggest.? And how productive are the new stores: Rs 120 crore from 30 of them is Rs 4 crore each in a part year, against Rs 5 crore for an average old store. The one number that would change the view is units per bill: if units rose, the bigger bill is customers buying more, which is demand, not price.