How To Increase Retail Sales Sales Per Square Foot

May 31, 2020

Efficient retail space is something many first time business owners don’t focus on. The metric revenue per square foot is a powerful tool to measure how well you’re doing in a space. In this article we’ll show you how to calculate this number and explore some of the best ways to increase retail sales per square foot. You’ll find that these changes will be powerful tools for increasing your retail business’s productivity.First Thing’s First: What Exactly Is Sales Per Square Foot?

First Thing’s First: What Exactly Is Sales Per Square Foot?

Sales per square foot is the dollar amount in revenue you make for every square foot. To calculate the sales per square foot of your space, take total revenue and divide it by total square feet of your space. Below are some of the most efficient sales per square foot companies in the world.
No alt text provided for this image
Sales per square foot is a good way to measure how efficient a space is because you can easily compare it to the cost per square foot you’re paying. Say you’re paying $50 per square foot, your revenue per square foot needs to be substantially greater than this number to be profitable (along with other costs). The larger this margin, the more economically efficient your space is operating. On average for retail 10% of your gross sales should cover your rent. Now depending on your size and business model that can change dramatically.
Something to consider is whether to include or exclude non-selling parts of the store, such as backroom areas, staff rooms and bathrooms. I typically suggest including them because they are included in your fixed operating costs.
Now that we have defined the importance of sales per square foot here are some tips on how to improve store productivity.

Increase Transaction To Basket Value

No alt text provided for this image
One great way to increase retail sales per square foot is to increase the transaction to basket ratio. That means that you want to try and make sure that the average basket a shopper brings to the till is higher in total value than it currently is. Now there are many ways you might go about doing this, but a few tried and tested in particular which you might want to think about, so we will focus on those specifically. For one, you might want to think about providing more luxurious goods, as they are always going to increase this basket value. That is something you might want to consider – but of course, not every business in retail is going to offer luxurious goods, so if yours is not one of them, that doesn’t mean there is nothing you can do. Any of the following will still be appropriate in that case.


We have all heard of up-selling, and in many ways it holds a somewhat mysterious place in the hearts of many shop owners. Up-selling is simply where you try to get customers to buy the higher priced product, and it is something that you should be trying to do in your retail store wherever possible, as long as you don’t actually badger any customers into feeling that they need to buy something they don’t really want to buy. However, as long as you are up-selling from time to time, you will still be improving and increasing your retail sales per square foot, so that is something that you will want to consider if you are keen to make that happen for real. Up-selling should definitely be in your arsenal to some degree, anyway.

Improve Store Layout

No alt text provided for this image
Plenty can be achieved by taking a step back and looking again at the store layout, and in this way you can hope to improve both sales as they stand and also store productivity in general. The first thing you should do is to think about decluttering the store’s shop floor. That should be relatively easy to do, and you should find that you are going to be able to make a huge difference to sales just from how much better that will look, so it is something that you should aim to do every now and then regardless. Messy spaces drive people away – but if your store is sparkling clean and tidy, you will bring more customers in.
At the same time, look at where people tend to go in the store most, and what the footfall and traffic looks like. That will help you to make the right decisions when it comes to putting which products where, which is in itself one of the most important things to be aware of when you are trying to improve sales across the board. “I wonder why they put milk in the back of the grocery store?” Product placement can improve sales dramatically. You should also take a look at signage and other things that might be affecting sales, and make sure that they are as good as possible. That will really help increase the bottom line smoothly.

Be Flexible With Payments

These days, there is really no excuse for a modern retail store not to accept all kinds of payments. You need to make sure that you are doing this if you want to keep your customers happy, and to make it more likely that a higher number of customers can come to you in the first place. There is nothing worse than losing a sale because you don’t take American Express. So make sure that you provide your customers with all the means that they might need, and you will be making many more sales in no time at all.

Optimize Prices

Pricing is always going to be an issue, and it really is something of a puzzle to get it right at all times. However, you are going to need to do so if you hope to increase your retail sales per square foot, so make sure that you are paying attention to this at all times as best as you can. With optimized prices and better promotions, you are going to have many more sales happening in no time, and that is going to mean a much more successful retail store. Another recommendation we have for pricing is making sure you are in line with the market and be aware of what your competitors are charging.
I hope you had a chance to gain value from this article and if you are shopping for retail space in the Treasure Valley let me know.
#commercialrealestateboise #boiseretail #ccimidaho