Sales per square metre is a retail productivity measure that divides a store's sales over a period by its trading floor area in square metres. It shows how much revenue each unit of space generates and is widely used to compare stores of different sizes.
The calculation takes sales from the point of sale system and the floor area from lease or plan records. Most retailers use selling space rather than total space, excluding stockrooms and back offices, and keep the definition consistent. Results are often reported annually, though monthly figures help with seasonal comparison.
Retailers use the measure to judge whether a site justifies its rent, to compare stores within a network and to decide how to allocate space between categories. Landlords and shopping centres use it to assess tenant performance and set expectations. It can also guide choices about fixtures, range and whether to expand or downsize a store.
There are limits. Comparing a small kiosk with a large department store is misleading, and a category with high-value items will naturally score higher than one with low prices. The figure says nothing about profit, so it should be read with gross margin. It also hides cause: a low value may reflect few visitors, low conversion or small baskets.
Sales per square metre matters because space is a major fixed cost, and rent is usually one of the largest expenses in retail. Pairing it with footfall, conversion rate and average transaction value lets operators break the number into its parts and see which part needs attention.