How to Increase Retail Sales per square foot and Improve Store Productivity

One of the best metrics is sales per square foot; you can use this for gauging the performance of the brick and mortar stores. These explain you about the efficient usage of the store space and also give insights to store layouts, staff performance, merchandising and more.

What is Sales per Square Foot and how can we measure it?

Retail Sales per square foot is the store’s average revenue for every foot of sales space. We can have the formula as total in-stores sales divided by selling area in square feet. Let’s us take an example, a store sold Rs 10,00,000 worth of products in its 1,000 square feet shop, then store’s sales per square foot would be:

Rs 10,00,000 ÷ 1,000 square feet = Rs 1,000 per square feet

When you calculate the sale per square foot, include all the selling areas but don’t forget to exclude the non-selling areas such stock rooms or receiving areas.

How to Increase Sales per square foot?

  1. Increase Transaction/Basket Value

 Luxurious products such as electronics stores and jewellery stores always have high sales per square feet. As luxurious products are more expensive people spend more with these retailers simply.

But those merchants or retailers who don’t have expensive products can still have high sales per square foot of the store. This totally depends on your store, so you can try one of the points given below:

  1. Practice up-selling and cross-selling

These are the two most common tactics used to increase the transaction value and ultimately sales per square foot.

Up-selling means the price version of the product that the customer looks to buy. For example, if you are selling a car to the customer, you will try to convince the customer to purchase the higher model of the same car, to convince the customer, we can say that we are doing the up-selling.

On the other hand, Cross-Selling means selling the items that complement the product such as, if a customer is buying a purse; you can recommend them a matching wallet to buy along with.

These help to increase to add value to the purchase. But in case, you did it wrong then you may miss out the sale. This makes it more important to have good knowledge of customers as well as to have good knowledge of products before you try to up sell or cross sell.

  1. Be Flexible with Payments

The size of the business transactions is directly affected by the budget of the consumers. So if you want to make your store with more transactions then make shopping more ‘’budget-friendly’’ at your store, this encourage the customer to spend more.

One of the ways is to provide flexible payment options to the buyers such as instalments. Consider using a solution like After Pay option, if you are not a fan of getting a full payment at the time of delivery, then give “buy now pay later” option to your customers.

Billy Parry, Head of Sales – SMB at After Pay, says that “retailers that have After Pay in-store see higher average order values than what they see with After Pay online. Giving your customers the option to pay for their purchase over time means they can buy more of what they want while being able to budget.”

  1. Optimize your prices or promotions

Try to look after the pricing strategy that can improve your sales. One of the strategies is ending prices with the number 9, so test this strategy when pricing your product or service.

This also applies to the promotion. Try more offers and discounts to see what get more sales. Various types of offers can be free gifts, loss leaders and more.

To figure out what is right for you the only way is to test various actions, measure the results, and make changes if necessary.

  1. Improve your store layout

If your sale per square foot is not up to the mark, consider optimizing your store’s layout. Space with less area get messy or crowded which make people to go from the store, even this create difficulty for the shopkeeper to find what they want. Instruct your staff to always clear the messy space and all the products must be at their right place.

Take a walk through your store and analyse what is not working with the sales. Perhaps some fixtures need to be moved or you need to make better use of signage. Also pay attention to the smooth flow of the traffic. Do see is there any fixture or any item that is in the way? Also take a look over your best products that they are placed at the best place where customers can have a look.

  1. Drive in-store traffic from online audiences

By attracting more visitors to the shop you can raise your sales per square foot. Always note this that many people browse online but many shoppers love to shop offline. For this digital marketing strategy becomes vital to put your products in front of the right audience online.

“One thing modern retailers can do to increase sales per square foot in their physical stores is to bring people in-store from online by adopting a genuine omnichannel strategy,” says Matt Warren, CEO at Veeqo.

 “For example, a fashion retailer could entice browsers into their latest styles through social channels like Pinterest and Instagram. Then have them save their favourite items to a wish list or shopping basket via mobile app or online site. Before finally offering a coupon they can redeem when coming in-store to try on the items.

“From here, making sure your store is arranged properly can be key. Knowing which items are regularly bought together and placing these close to each other can be great to increase Average Transaction Value (ATV). But also ensuring you have staffs that are well-trained in your product catalogue and able to up sell customers as much as possible can be a real game changer.”

  1. Encourage people to come in and stick around

The more people walk in your store, the more chances for potential sales to be occurred. If your store is in a crowded place then there are more chances that people will purchase more. Shop Keepers who try to encourage customer to stick around in-store will have the chances of 20-40% more sales.

  1. Invest in your staff

Store employees have a direct impact on the sales and customer satisfaction, so invest in the staff training and motivation over the time again and again. Without great employees, your store performance may occur, but with great employees your can also perform well.

For the increment in sales per square foot, some of the things you must do with your staff is:

  1. Train them to get rid of their selling fear.
  2. To demonstrate different sales scenario, role-play with them.
  3. Educate them about the suggestive selling, up-selling etc.
  4. Encouraging positive reinforcement and peer-to-peer recognition.


  1. Have a winning product assortment

Don’t waste your store space with those products that aren’t selling. Always keep an eye on your store activities and use those insights that help on your product assortment decisions.

Generate reports for the time period (weekly, monthly, quarterly or half yearly), these reports help you to identify when customers are buying from you, and what they are purchasing and then stock up accordingly.

That’s what Adrienne Wiley, Owner & Operator of chic fashion boutique Covet, did in her business.

“I actually determined what I should be stocking more of in my new location based on sales by category and then fine-tuned the hours by looking at the sales by hour,” she said. Doing this helped her improve how she ran her stores, and she’s advising other retailers to do the same.