This metric provides insights into how effectively a retail business is using its space. The higher the sales per square foot, the more efficiently a business is utilizing its physical space.
How to Measure Sales per Square Foot
The formula for calculating Sales per Square Foot is pretty straightforward – you simply divide your store’s total sales by the total square footage of your sales space. It looks like this:
Total Sales / Sales Square Footage = Sales per Square Foot
|1. Calculate Total Sales
|Add up all the sales your store has made in a specific period
|2. Measure Sales Square Footage
|This is the area of your store dedicated to selling – not including storage or office areas
|3. Divide Total Sales by Sales Square Footage
|This gives you the sales per square foot metric
It’s important to routinely calculate your Sales per Square Foot as it gives you insights into your store layout effectiveness, merchandising success, and overall operational efficiency.
Low Sales per Square Foot might signal a need for reconfiguration, while high numbers indicate you’re on the right track. Always aim for improvement, because every square foot counts!