Work out store sales per square foot instantly with clear inputs, formula shown and shareable results.
Sales per square foot is the primary retail productivity measure and should be quoted on selling area, not gross area, so that back-of-house differences do not distort comparisons. Rent to sales is the companion measure that determines whether the productivity is high enough for the location.
Sales density
Sales per sq ft = Annual sales / Selling area
Rent to sales
Rent to sales % = Annual rent / Annual sales x 100
Roughly 8-12% for most specialty retail, 4-6% for grocery, and up to 15% for high-margin categories in prime locations. Above that, store profitability is very hard.
Because only selling area generates revenue. Two stores with identical sales density on selling area can look very different on gross area depending on stockroom size.