Retail and consumer goods
Sales per square metre
Store sales divided by selling space: how productive the space is.
Facts checked against sources onWhat does Sales per square metre mean?
Sales per square metre (or per square foot in the United States) is a store's sales in a period divided by its selling area. Rent and many store costs scale with space, so this shows how hard the space works. Example: a 500 square metre store selling 2.5 million a year makes 5,000 per square metre. Compare only similar formats, since a jeweller will always beat a furniture store. Retailers use it to decide which stores to close, how much space to give each category, and whether a smaller format could make more profit.
Where does it come up in case interview prep?
Related terms
- Like-for-like sales (LFL)Sales growth from stores open in both periods, leaving out new and closed stores.
- Capacity utilizationActual output as a share of the most that could be produced.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Shrink (shrinkage)Inventory lost to theft, damage, errors or spoilage.
- MarkdownA lasting price cut to clear stock that is not selling.
- Sell-through rateThe share of stock received that has been sold within a period.
- Private label (own brand)Products sold under the retailer's own brand rather than a manufacturer's.
- Trade spendThe money brands pay retailers and distributors to stock, display and discount their products.
Learn it in context
See Sales per square metre at work in a lesson from Retail, with checks as you go.
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