What is 'Sales Per Square Foot'

Sales per square foot is a popular sales metric used in the retailing industry. Sales per square foot is simply the average revenue a retail business creates for every square foot of sales space.

BREAKING DOWN 'Sales Per Square Foot'

Sales per square foot is used by businesses and analysts alike to measure the efficiency of a store's management in creating revenues with the amount of sales space available to them. The higher the sales per square foot, the better job management is doing of marketing and displaying the store's products. There is a wide dispersion of this metric in retailing. Apple produces around $5,500 in sales per square foot and Tiffany generates approximately $3,000 per square foot. By contrast, sales per square foot for Walmart and Target are only around $400 and $300, respectively.

Growing Irrelevance of this Metric?

The retail landscape is evolving, with changes to traditional business models forced upon by e-commerce (read: Amazon).  "Omnichannel" is the new buzzword in retailing that describes a hybrid approach to physical stores and online venues to sell goods to customers. Thus, with the amount of retail space on the decline, assuming the trend plays out, sales per square foot may not be as relevant as a sales efficiency measure to management or analysts as it has been in the past.

  1. Add-On Factor

    The add-on factor is the amount paid by a tenant for use of common ...
  2. Residual Sum Of Squares - RSS

    A residual sum of squares is a statistical technique used to ...
  3. Comparable Store Sales

    Comparable store sales is a retail store's revenue in the most ...
  4. Retail Industry ETF

    A retail industry ETF is an exchange-traded fund that invests ...
  5. Chain Store Sales

    An indicator that provides information on the monthly sales volumes ...
  6. Base Year

    A base year is the first of a series of years in an economic ...
Related Articles
  1. Tech

    What is Square, Inc?

    Find out how Square helps small businesses accept credit cards, track sales and inventory through their mobile point of sale (POS) systems.
  2. Tech

    Fintech Leader Square Posts Q3 Earnings Beat (SQ)

    Jack Dorsey's payments and financial services platform celebrates one year on the public markets with an earnings beat, securing revenue growth of 32% YOY.
  3. Tech

    Needham Initiates Square Inc. at Buy

    Analysts applaud the fintech leader's 'complete and cohesive' platform for clients of all sizes.
  4. Investing

    4 Reasons Square’s Gains Can Multiply: Jefferies

    The fintech platform, up 180% YTD, could see a major uptake on multiple new growth drivers.
  5. Tech

    Fintech: Square Maintains Hold on Mobile Payments (SQ)

    With the announcement of faster chip card readers, Square's bread and butter remains in mobile payments.
  6. Tech

    Analysts Weigh in on Electronic Payments Firms

    Pacific Crest lifts Square's price target and reiterates an overweight.
  7. Investing

    Square's Overbought Shares May Plunge in Short Term

    Square Inc. stock has soared in 2018, rising by nearly 78%, but shares may be poised to pull back.
  8. Insights

    Square Is Doing Bitcoin Trials

    The mobile payment solutions provider has given some of its Cash app users the option to buy or sell Bitcoin.
  9. Investing

    Square to Rally 20% on Expanding Ecosystem

    Jack Dorsey's merchant platform has only penetrated 1% of its addressable opportunity: Analyst.
  10. Investing

    Why Square Stock Plunged 31% Last Week (SQ)

    Investors were spooked not only by Square's wider Q1 loss, but the company's second quarter forecast of merely in-line results.
  1. What is the difference between standard deviation and variance?

    Understand the difference between standard deviation and variance; learn how each is calculated and how these concepts are ... Read Answer >>
  2. What is the best measure of a stock's volatility?

    Understand what metrics are most commonly used to assess a security's volatility compared to its own price history and that ... Read Answer >>
  3. What's normal for profit margin in retail sector?

    Find out the typical profit margin for a major retail company, and learn how it compares to the profit margins for other ... Read Answer >>
  4. Why are efficiency ratios important to investors?

    Learn about efficiency ratios, such as the asset turnover ratio, and why these metrics are important to investors when analyzing ... Read Answer >>
  5. What is the difference between standard deviation and average deviation?

    Understand the basics of standard deviation and average deviation, including how each is calculated and why standard deviation ... Read Answer >>
  6. How does government regulation impact the retail sector?

    Learn about the types of federal agencies and regulations that retail businesses have to deal with, including inconsistent ... Read Answer >>
Trading Center