Indian Retailer Sales per Sq Ft comparable to US Retailers
by Deepak Sharma on Thursday, September 04, 2008
Interesting metrics related to Retail Sales per Square Feet coming out of on news article (Retail biggies force to focus on destination malls) I read yesterday. In India, the modern neighborhood format stores are achieving sales per square feet around Rs16-20 per sq ft per day. And a number of Rs 35-40 (roughly $1) is considered viable to keep running the store.
The thruput (sales) for the modern neighborhood formats currently stands at Rs 16-Rs 20 per sq ft per day as against Rs 35-Rs 40 per sq ft per day, which industry experts reckon is the minimum required for viability. There is a huge mismatch between the rents paid and the actual sales that take place in the formats.
This comes to be roughly $360 for the year which is very much comparable to that of Retailers in United States, which considers $300 per square feet as a respectable number (as of 2005).
As of 2005 annual store sales in the range of $300 per square foot ($3,000/m²) is considered a respectable result in the United States as the national average for regional malls is $341 per square foot, but the target number depends on the location, the type of store and other factors.
Just to corroborate this, I searched for Reliance Retail's (One of India's top Retailers) Sales per square feet and found this article, Reliance Fresh and Small. According to this article, Reliance Retail could be having Sales per sq ft north of $300.
Sources say that Reliance believes each Reliance Fresh outlet could earn annual revenues of Rs 3 crore. That’s a sale per sq. ft of roughly Rs 12,500. Industry sources say this is in line with what other chains have achieved in the past. For instance, at its peak FoodWorld had managed a Rs 300-crore turnover on its 80 stores. The average size of a store was about 3,000 sq. ft — or sales of Rs 12,500 per sq. ft.
Some more details on Sales per Square Foot for US Retailers: