Glossarytaught in M5.05
Sales per square foot
Also called revenue per square foot, sales density.
Revenue divided by retail selling area. The productivity measure of a physical store network.
A chain with ₹3,300 crore of sales across 11 lakh square feet does ₹30,000 a square foot.
Sales density sets store economics. Rent, staff and electricity scale with area, so a store below a threshold of sales density can't cover its fixed costs whatever its gross margin.
Rising density with flat store count is the best combination in retail. It means the existing asset is working harder.