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Just a few years ago, key performance indicators for many retail companies included sales growth, opening new stores, expanding product ranges and increasing turnover. However, as the market becomes more complex, revenue growth alone is no longer enough.
Higher sales do not always translate into higher profits. The overall economics of a business are affected by discounts, promotional campaigns, cashback programs, payment system fees, installment plans, financing costs, returns and changes in cost of goods sold.
Therefore, the financial model of modern retail must take into account not only sales volumes but also their quality: actual margins, cash flow, inventory efficiency and the cost of financing.
As Larisa Berezhnova notes, sales, profit and cash flow are different indicators. A company may demonstrate revenue growth while simultaneously facing declining profitability or a shortage of free cash due to increasing inventory, accounts receivable and the lengthening of its operating cycle.
Under these conditions, financial management goes beyond traditional reporting. The P&L, balance sheet and cash flow statement need to be viewed as a single system linking commercial decisions to their impact on profit, working capital and cash flow.
One of the notable changes in recent years has been the growing role of banks in the operating model of retail companies.
For retailers, a bank is no longer simply a transaction partner or source of financing. Access to working capital, transaction processing speed, payment solutions, installment plans, factoring, trade finance and the quality of IT integration directly affect business capabilities.
This factor is particularly important for companies working with imports, seasonal sales and large inventories. Procurement, logistics, warehousing and marketing activities require a constant flow of working capital.
At the same time, it is not only the cost of borrowed funds that matters. Businesses also need fast decision-making, flexible financial instruments and predictable access to financing.
Digital payments represent another important area. QR payments, installment plans, cashback and other financial services are becoming part of the customer journey while also influencing retailers' commercial performance.
Thus, choosing a financial partner is becoming a strategic decision, and banking products need to be evaluated in terms of their impact on margins, cash flow, working capital and customer conversion.
In a highly competitive environment, retailers need to understand not only their average business-wide margin, but also exactly wh ere that margin is generated and where it is lost.
Overall profitability is affected by purchase prices, currency fluctuations, logistics, supply terms, markdowns, returns, discounts, supplier bonuses and payment system fees.
As a result, margins are increasingly analyzed by category, product, store, sales channel, supplier and promotional campaign. This approach makes it possible to identify areas that generate high turnover but make only a minimal contribution to profit.
Discount management also requires particular attention. Promotions should be viewed not only as a tool for increasing sales, but also as a commercial decision with a specific financial impact.
Inventory is equally important. Goods held in stock effectively represent cash that is tied up. Low inventory turnover increases the need for working capital, storage costs and the risk of subsequent markdowns.
At the same time, excess inventory can coexist with shortages of high-demand products. Therefore, companies need to assess not only the overall volume of inventory, but also its structure, sell-through rate and alignment with current demand.
Regular cash flow forecasting is becoming increasingly important for managing these processes. In particular, a 13-week forecast makes it possible to align future purchases, deliveries, sales, supplier payments, tax obligations and operating expenses.
Digitalization is gradually ceasing to be a standalone IT project and is becoming part of the retail operating model.
Growing requirements for accounting transparency, the development of payment services, product labeling and digital channels require companies to improve data management and automate processes.
For retail businesses, this means not only implementing new systems, but also building a unified data architecture, redesigning internal processes and improving the quality of management information.
Artificial intelligence opens up additional opportunities. When high-quality data is available, AI tools can be used to identify deviations, analyze changes in key metrics and determine the causes of declining margins, rising inventory or deteriorating cash flow.
In the long term, this changes the very approach to management analytics: instead of analyzing large numbers of prepared reports, executives gain the ability to obtain answers to specific business questions faster and identify areas that require attention.
Against this backdrop, the CFO is becoming a link between the commercial and operational teams, IT, marketing, banks and business owners.
The primary task of the finance function is gradually shifting from recording results to managing the economics of growth. It is important not only to increase sales volumes, but also to understand which sales generate profit and cash flow, how efficiently inventory and working capital are being used, and which financial instruments support the company's development.
For Central Asian retail, this is particularly relevant as new retail formats, digital payments and omnichannel models continue to develop. The competitiveness of companies will increasingly be determined not only by the scale of their business, but also by the quality of management of their financial and operating models.
Retail in Central Asia: Growth in Sales No Longer Guarantees Profit Growth
Retail in Central Asia continues to develop amid growing consumer demand, the spread of new retail formats, digital channels and payment services, reports FinTech & Retail CA. At the same time, as the market expands, the economics of the retail business are becoming more complex: companies are facing pressure on margins, rising financing costs, the need to manage inventory more efficiently, and a shift toward more precise use of data.
Larisa Berezhnova, CFO of Evolution Motors and an expert in financial management and the economics of the retail business, spoke about the current changes in the financial model of retail at the International PLUS-Forum Digital Uzbekistan 2026.
Fr om Revenue Growth to Managing Business Economics
Just a few years ago, key performance indicators for many retail companies included sales growth, opening new stores, expanding product ranges and increasing turnover. However, as the market becomes more complex, revenue growth alone is no longer enough.
Higher sales do not always translate into higher profits. The overall economics of a business are affected by discounts, promotional campaigns, cashback programs, payment system fees, installment plans, financing costs, returns and changes in cost of goods sold.
Therefore, the financial model of modern retail must take into account not only sales volumes but also their quality: actual margins, cash flow, inventory efficiency and the cost of financing.
As Larisa Berezhnova notes, sales, profit and cash flow are different indicators. A company may demonstrate revenue growth while simultaneously facing declining profitability or a shortage of free cash due to increasing inventory, accounts receivable and the lengthening of its operating cycle.
Under these conditions, financial management goes beyond traditional reporting. The P&L, balance sheet and cash flow statement need to be viewed as a single system linking commercial decisions to their impact on profit, working capital and cash flow.
Banks Are Becoming Part of the Retail Business Model
One of the notable changes in recent years has been the growing role of banks in the operating model of retail companies.
For retailers, a bank is no longer simply a transaction partner or source of financing. Access to working capital, transaction processing speed, payment solutions, installment plans, factoring, trade finance and the quality of IT integration directly affect business capabilities.
This factor is particularly important for companies working with imports, seasonal sales and large inventories. Procurement, logistics, warehousing and marketing activities require a constant flow of working capital.
At the same time, it is not only the cost of borrowed funds that matters. Businesses also need fast decision-making, flexible financial instruments and predictable access to financing.
Digital payments represent another important area. QR payments, installment plans, cashback and other financial services are becoming part of the customer journey while also influencing retailers' commercial performance.
Thus, choosing a financial partner is becoming a strategic decision, and banking products need to be evaluated in terms of their impact on margins, cash flow, working capital and customer conversion.
Margins and Inventory Are Becoming Key Areas of Control
In a highly competitive environment, retailers need to understand not only their average business-wide margin, but also exactly wh ere that margin is generated and where it is lost.
Overall profitability is affected by purchase prices, currency fluctuations, logistics, supply terms, markdowns, returns, discounts, supplier bonuses and payment system fees.
As a result, margins are increasingly analyzed by category, product, store, sales channel, supplier and promotional campaign. This approach makes it possible to identify areas that generate high turnover but make only a minimal contribution to profit.
Discount management also requires particular attention. Promotions should be viewed not only as a tool for increasing sales, but also as a commercial decision with a specific financial impact.
Inventory is equally important. Goods held in stock effectively represent cash that is tied up. Low inventory turnover increases the need for working capital, storage costs and the risk of subsequent markdowns.
At the same time, excess inventory can coexist with shortages of high-demand products. Therefore, companies need to assess not only the overall volume of inventory, but also its structure, sell-through rate and alignment with current demand.
Regular cash flow forecasting is becoming increasingly important for managing these processes. In particular, a 13-week forecast makes it possible to align future purchases, deliveries, sales, supplier payments, tax obligations and operating expenses.
Digital and AI Are Becoming Part of Management Infrastructure
Digitalization is gradually ceasing to be a standalone IT project and is becoming part of the retail operating model.
Growing requirements for accounting transparency, the development of payment services, product labeling and digital channels require companies to improve data management and automate processes.
For retail businesses, this means not only implementing new systems, but also building a unified data architecture, redesigning internal processes and improving the quality of management information.
Artificial intelligence opens up additional opportunities. When high-quality data is available, AI tools can be used to identify deviations, analyze changes in key metrics and determine the causes of declining margins, rising inventory or deteriorating cash flow.
In the long term, this changes the very approach to management analytics: instead of analyzing large numbers of prepared reports, executives gain the ability to obtain answers to specific business questions faster and identify areas that require attention.
The Role of the CFO in Retail Is Changing
Against this backdrop, the CFO is becoming a link between the commercial and operational teams, IT, marketing, banks and business owners.
The primary task of the finance function is gradually shifting from recording results to managing the economics of growth. It is important not only to increase sales volumes, but also to understand which sales generate profit and cash flow, how efficiently inventory and working capital are being used, and which financial instruments support the company's development.
For Central Asian retail, this is particularly relevant as new retail formats, digital payments and omnichannel models continue to develop. The competitiveness of companies will increasingly be determined not only by the scale of their business, but also by the quality of management of their financial and operating models.