What is Year over year growth?

For a small Shopify store, year over year growth tells you if the business is actually getting bigger or if a good month is just a seasonal bump. A single month of strong sales means little on its own. Comparing it to the same month last year shows the real trend, because it removes the effect of holidays, weather and other seasonal patterns that repeat every year.

Use it when planning how much stock to buy for an upcoming season. If a candle store sold 500 units last November and expects 10% growth this year, that points to ordering closer to 550 units rather than guessing from recent weeks alone.

Formula

Example

A coffee shop sold 800 bags of beans last July and 920 bags this July. Year over year growth = (920 - 800) / 800 x 100 = 15%. The owner uses this to plan next July's order, starting from 920 units and adjusting up for expected growth rather than basing it on last month's sales alone.

Common mistakes

• Comparing to the wrong period, such as last month instead of the same month last year, which hides seasonality.
• Ignoring one-off events, like a big promotion or stockout last year, that distort the comparison.
• Using year over year growth alone without looking at order volume or margin, which can hide a drop in profitability behind rising unit sales.

Year over year growth and SteadyShelf

SteadyShelf's demand forecasts can factor in last year's sales for a SKU, so order-by dates and suggested quantities reflect expected year over year growth rather than just recent trends.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Seasonality · Demand forecasting · Baseline demand · Forecast horizon

Full inventory glossary

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