Most business use $300 sales per square foot as a bottom line benchmarking figure. You probably already know your bottom line, you need to generate x amount of sales to pay your bills, rent and staff.
- Calculates your ROI (Return on Investment)
- Helps to make purchase decisions
- Helps to create a goal is to generate more business from existing areas
- Assists in managing business and profitability
- Good number to share with employees so they understand overall retail planning and finances.
Sales Per Square Foot Formula
- Total Net Sales ÷ Square Feet of Selling Space = Sales per Square Foot of Selling Space
- Total Net Sales= $20,000 per month
- ÷ 1000 sq. Ft
- = $20 sales per square foot.
- The key- strive on a monthly and yearly basis to use sales per square foot as a goal and a basis for growth. Involving staff, having 1 person in charge to report the stats at a monthly staff meeting, gets the whole team involved in the office profitability.
- Put a Sale Rack in the back of the store- to get consumers to walk thru the whole store.
- Set aside up to 5% of an area/stock dedicated to ongoing ‘test’ markets. Sales are then monitored and evaluated as to results.
- Empower employees to each create a ‘Eye Profit Zone’ – let each be responsible for a ‘Eye-Zone’ profit. As an example- Staff ‘A’ is responsible for Accessories, Staff B is responsible for Contact Lens, Staff B responsible for tracking and sell through of Sunglasses.
- Use Groupon or FourSquare to move slower moving products.
- Post Sale items or specials on Facebook or Twitter
- Try ‘Product of the Month’ to move slower moving items.
- Have special events, trunk shows, speakers to bring in more consumers.
Top Performing Retail Stores
- Apple- $4,000 per square foot per year
- Costco Wholesale- $976 per square foot per year (2008)
- Forum Shops at Caesars $1300 per square foot per year
- Walmart’s sales per square foot is about $422.00