How to build a retail operating model to maximize EBITDA in high-pressure markets

From the latest market study of the region, the data that most worries the steering committees is not the drop in sales volume, but the accelerated trajectory with which traditional consumption is losing ground to high-efficiency formats such as hard discount .

When the numbers get tight, the executive conversation almost always veers toward aggressive discounting, destructive promotions, or across-the-board cost-cutting. It almost never focuses on the root cause: the lack of a comprehensive operating system that eliminates unnecessary complexity and captures true value in the store.

The failure of linear cuts versus the efficiency of the operating model in retail

The traditional retail operating model operates with EBITDA margins of between 3% and 4%, while hard discount models achieve levels of 6% to 8%. The reason lies not only in selling at lower prices, but also in having an operational architecture designed to reduce friction, protect gross margin, and ensure execution.

Faced with budget constraints, the usual response is a across-the-board reduction in resources (fewer staff hours, reduced visibility, less frequent restocking). This approach distributes the impact equally across all stores. The result is predictable: the out-of- stock rate increases, the in-store experience deteriorates, and dissatisfied customers migrate to the competition.

The Architecture of the Retail Growth System (RGS)™

To address the silent margin leak and accelerate EBITDA growth by 15% to 25%, the RGS™ model structures operations through 6 interconnected pillars that directly impact different lines of the P&L:

Pillar	Operational Approach	Impact on P&L
1. Traffic Engine	Attracting traffic, expanding formats, and entering new categories.	Top-Line Growth ( Gross Revenue ).
2. Space & CatMan	SKU rationalization, layout redesign, and JBP negotiation with suppliers.	Expansion of Gross Commercial Margin.
3. Basket Maximizer	Out-of-stock prevention (OOS), pricing architecture and cross-merchandising .	Increase in Net Margin per Basket and value per square meter
4. Loyalty & LTV	Data capture, RFM segmentation, and retention strategies.	Increased Customer Lifetime Value and Share of Wallet .
5. Tech & Data Engine (Crosscutting)	Real-time visibility, BI dashboards, and replenishment automation.	OPEX efficiency and failure reduction.
6. Operational Execution (Transversal)	Strict shrinkage control, standards, and field training.	Direct Reduction of Costs and Waste.

The 4 tactical fronts to recover profitability

1. Space and Catalog Optimization (Space & CatMan)

Overcrowding the shelf with slow-moving SKUs ties up working capital. Streamlining the catalog (reducing inefficient assortment by 20% to 30%) allows for more shelf space for high-margin products and accelerates inventory turnover.

2. Ticket Maximization and Out-of-Stock Control (Basket Maximizer)

Every percentage point of stockout represents a lost sale. Establishing strict replenishment protocols and designing non-destructive promotions ( Good-Better-Best ) allows you to increase the average order value and maximize the gross margin return on investment (GMROI).

3. Capturing customer value (Loyalty & LTV)

Traditional retail typically identifies less than 15% of its shoppers at the checkout. Integrating layers of data to identify high-value customers allows for dynamic retention campaigns and increased purchase frequency without relying on mass promotions.

4. Loss control and operational discipline (Ops Excellence)

Lack of operational compliance negatively impacts profitability. Implementing a comprehensive loss prevention program allows for reducing operational shrinkage from 6% to a standard of 2.5%, transferring that percentage directly to the bottom line of the P&L.

Implementation of the retail operating model in three stages

Deploying the RGS™ system does not require rebuilding the company from scratch, but rather moving forward through a structured transformation:

• Diagnosis and Baseline (Weeks 1-2): Mapping the operational reality of the 6 pillars and quantifying the real EBITDA opportunity with respect to the sector's efficiency standards.

• Design and Planning (Weeks 2-3): Creation of the transformation playbook , including assortment rationalization, the new promotions architecture, and alert automation.

• Consolidation and Scaling (Weeks 13+): Institutionalization of management routines, continuous training of store teams and replication of the model in the rest of the commercial park.

The question for your next executive committee

The discussion at the board meeting should not focus on how much to cut across the board, but rather on which pillars of the operation are experiencing value leaks and what real-time visibility there is on the availability of the priority assortment.

Correcting the operational architecture and improving the quality of execution in store allows you to capture the volume that the competition lets go, ensuring profitable and sustainable growth regardless of the pressures of the economic environment.

Do you want to bring this model to your operation?

At TMC Consultores we can help you diagnose opportunities for improvement in your operation, design the right model for your business and support its implementation, turning the different pillars of the Retail Growth System (RGS)™ into concrete initiatives aimed at improving profitability and EBITDA.

If you want to explore how to apply this model in your organization, let's talk.

---