Productivity Benchmark Ratios

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Sales per Square Foot of Selling Space

= Net Sales ÷ Total Square Feet of Selling Space
What it is
Utilization of selling space is critical. This benchmark measures the productivity of selling space in terms of sales volume: stocked shelves with fast-moving, high-margin merchandise. Since space is at a premium and breadth of selection is a key element of the retail mix, keep only enough stock on the shelves for any item to assure availability between replenishment cycles.
Why it matters
A higher ratio is preferred. The saved space from the extra stock of any given item will allow the broadening of the merchandise mix, thus increasing total sales and sales per square foot. However, if a store has too little stock on its shelves, stock-outs would preclude sales of desired items, driving down total sales and sales per square foot.
Other ratios or actions to consider
The amount of space or different types of merchandise; sales by department, class, or item; inventory turnover; and shelf replenishment policies are some of the variables of this benchmark.
 
Sales per FTE Employee
= Net Sales ÷ Store FTE Employees
What it is
Use this figure to measure the productivity of store employees—in terms of sales volume. FTE is the full time equivalent number of staff. For example, 2 part-time staff working 20 hours each per week equals 1 FTE employee. Use How To Calculate FTE Staff Chart (MS Excel 2010 file format) to help you calculate FTE staff for your entire store.
Why it matters
The higher the ratio reflects the more efficient use of staff. It is important to have the right level of staffing, rather than the lowest possible level. Skimping on sales staff can decrease sales. Having too few cashiers can increase checkout times and result in customer and staff dissatisfaction. Achieving the right balance means the store can meet service requirements and still manage personnel costs.
Other ratios or actions to consider

Consider exploring variations of this measure between stores include the number and mix of different types of staff, staff levels by hour of the day, staff effectiveness, and cross-training among staff. 

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