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Does (Retail) Size Matter? $/sq. ft. of Mall Stores

November 09th, 2010


I recently took my daughter to a birthday party at a local mall. Having a couple of hours to kill, I headed to the cramped and crowded Apple Store to checkout the new MacBook Air. After succumbing to the allure of the iPod Touch and a quick coffee stop at Barnes and Noble’s Café, I settled in a comfortable sofa, like many others waiting, listening to the live piano music at the bright and airy Nordstrom that anchors the mall. I could not help wonder that this comfortable space sandwiched between Women’s Shoes and the make-up counters was a lot larger than the Apple store. How large the stores in the mall are and how effectively they use their space? Read on…do the results surprise you?

The attached graphic shows the size in square feet of popular mall stores and how much they sell in a year per square feet (See Notes 1 & 2 for information on calculations). I have also added a few other stores like Best Buy, Wal-Mart, and Home Depot into the mix as a basis for comparison.

Most retailers use sales per square feet to measure how efficiently they use their retail space compared to their closest competitors. For example an average J. Crew store is about 6200 sq. ft. and generates $573/sq. ft. while the Abercrombie & Fitch store is just over 7000 sq. ft. and generates sales of $489/ sq. ft. Does this mean J. Crew is outperforming A & F? It’s a little more complicated – they each stock different styles and have branded stores and cater to a different demographic (although there may be an overlap). But at least based on this measure, J. Crew seems to be doing more with less. Costco generates $970 per sq. ft. with the average store size close to 142,000 sq. ft. while its biggest competitor Sam’s Club generates about $550 per sq. ft. with an average size of 132,000 sq. ft.

So you noticed! By far the best performing retailer is Apple. Apple’s latest report estimates an average store sales of $34.1 million. With an average store size of 6,000 sq. ft., that translates to a productivity number of $5,683 per sq. ft.! According to Bloomberg, Apple’s marquee store on Fifth Avenue (the “Glass Cube”) does almost $350 million in sales in a year. At 10,000 sq. ft. that’s $35,000 per square feet making it possibly the highest grossing retailer on 5th Avenue. Tiffany & Co. is probably the closest to Apple with their sales floor on 5th Avenue generating about $18,000 per sq. ft. (system-wide Tiffany & Co. averages to about $2600/sq. ft.)

When I picked up my six-year old from her party, she knew exactly where to go next – “Daddy lets learn how to make movies!!” Cha Ching! for Apple’s One-to-One service. No wonder…


1. All store data are from 2008. The only exceptions are Apple and Best Buy for which I used 2010 data to reflect the sales of the iPhone & iPad.

2. Most of the data is readily available from a retailer’s filings with the Securities and Exchange Commission. For example from Best Buy’s 2010 filing, we know that they have 1,192 stores in the USA with a total square footage of 42,488,000 sq. ft. So the average store size is simply 42,488,000/1,192= 35,644 sq. ft. From the same 10K filing, the reported domestic sales are $37,314 million, so the sales per square feet is simply $37,314 million/42,488,000 = $878. Obviously not all the square footage is used for selling, — some is used for inventory, administrative offices and such so the calculations reflect gross square footage. While approximate, these calculations provide insightful snapshots into retail space productivity.

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