The Sales Per Square Meter metric is a unique measure of the sales productivity of a retail store. It is calculated by dividing the total sales generated by a store in a given period of time by the size of the store, typically measured in square meters.

‍

Using this metric can help retailers understand the efficiency of their store and identify opportunities for growth. In this guide, we will discuss how to use the Sales Per Square Meter metric to drive growth in a retail store.

‍

Step 1: Calculate your store's Sales Per Square Meter

To calculate your store's Sales Per Square Meter, you will need the following information:

• Total Sales: Total Sales generated by your store over a given period of time (e.g. month, quarter, year)
• Store Size: The size of your store, measured in square meters

Once you have this information, you can calculate your store's Sales Per Square Meter by dividing the total sales by the size of the store. For example, if your store generated $50,000 in sales in a given month and has a size of 500 square meters, your store's Sales Per Square Meter would be $100 ($50,000 / 500 square meters = $100).

‍

Step 2: Compare your store's Sales Per Square Meter to industry benchmarks

Once you have calculated your store's Sales Per Square Meter, you can compare it to industry benchmarks to see how your store is performing compared to others in your industry. There are several sources you can use to find industry benchmarks for Sales Per Square Meter, including industry trade associations and market research firms.

‍

It is important to note that different industries, industry categories and types of retail stores will have different benchmarks for Sales Per Square Meter. For example, a grocery store will likely have different benchmarks than a clothing store. Make sure you compare your store's Sales Per Square Meter to benchmarks that are relevant to your industry and store type. Further demographic information around the store location, along with foot traffic volume will impact this metric relative to other similar stores.

‍

Step 3: Identify opportunities for improvement

If your store's Sales Per Square Meter is lower than the industry benchmarks, it may indicate that there is room for improvement. To identify opportunities for improvement, you can conduct an analysis of your store and its operations. This can include looking at factors such as store layout, product mix, pricing, and customer service.

• Before you beat yourself up about your store performance, you need to be sure that the benchmark value which you are comparing yourself too is the correct benchmark. A store with 500 square meters in a suburb with 10,000 people won't perform as well with the same sized store in a suburb with 100,000 people, and no competition on main street.
  

Once you are sure the benchmark is comparable. Here are some potential areas for improvement that you may want to consider:

• Store layout: Is your store laid out in a way that is conducive to maximizing sales? Are products displayed in a way that is easy for customers to find and access? Are high-traffic areas used effectively to showcase products and drive sales?
• Product mix: Does your store offer a diverse range of products that meet the needs of your customers? Are there any products that are underperforming and could be removed or replaced with more popular items?
• Pricing: Are your prices competitive compared to other stores in your market? Are you using pricing strategies such as discounts, promotions, and loyalty programs to drive sales?
• Customer service: Is your store providing a positive customer experience? Are your employees knowledgeable and helpful? Are you offering services such as returns and exchanges that are convenient for customers?

Step 4: Implement strategies to improve your store's Sales Per Square Meter

‍

Once you have identified opportunities for improvement, you can develop and implement strategies to increase your store's Sales Per Square Meter. This can include changes to your store layout, product mix, pricing, and customer service.

‍

For example, if you identified that your store layout is not optimal for maximizing sales, you may want to rearrange the layout to highlight popular products and create more effective traffic flow. If you identified that your product mix is lacking, you may want to add new products that are in demand and remove underperforming products.

‍

In conclusion, using the Sales Per Square Meter metric can help retailers understand the efficiency of their store and identify opportunities for growth. By calculating their store's Sales Per Square Meter and comparing it to industry benchmarks, retailers can identify areas for improvement and implement strategies to increase their store's sales productivity. By using this metric and taking action based on its findings, retailers can drive growth and improve the performance of their store.