How to Calculate Profit and Loss in Retail

Topics: Area, Imperial units, Retailing Pages: 3 (326 words) Published: January 18, 2013
How to Calculate Sales
Per Square Foot

Retailers use this
data to examine differences in same-
store sales over time. Corporate
analysts use this data to compare
sales in different store locations of a
retail chain, regardles of store size.
This comparison can aid in deciding
which locations to expand and which
to contract. In addition. Sales per
square foot is also by commercial
property owners used to determine
to determine the appropriate level of
rent to charge a store.
Steps (Tap on step to mark as

Step 1 of 4

Examine sales records to
determine the time period
you wish to measure. Sales
per square foot can indicate
yearly or monthly sales.
Generating both sets of data
allows you to see store
performance year-to-year as
well as month-to-month.

Step 2 of 4

Generate net sales figures for
the time period in question.
Net sales are equivalent to
gross sales (the total dollar
amount of products
purchased at the retail
location) less returns (the
total amount of those
products returned to the
store for a refund). As an
example, assume gross sales
of $350,000 and returns of
$50,000, resulting in net sales
of $300,000.

Step 3 of 4

Obtain retail square footage
data for the store in question.
The total retail square footage
includes all area where stock
is displayed, but does not
include bathrooms, receiving
areas or areas behind
counters. For the example,
assume a total retail square
footage of 1000 square feet.

Step 4 of 4

Divide the net sales by the
total square footage to
calculate sales per square
foot. Following the above
example, divide $300,000 by
1000 square feet, resulting in
$300 in sales per square foot.

Tips & Warnings.

When comparing sales
per square foot between
different locations,
calculate both the net
sales and the retail
square footage in the
same way in order to
obtain a useful "apples
to apples" comparison.
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