This is calculated by dividing a company's retail net sales (ie, excluding any non-retail revenue like franchise fees) by the "selling" square footage of its stores.
This metric is used primarily in the Retail and restaurant industries. Selling square footage excludes square footage used to house inventory or used for office functions. Retail real estate (IE, paying for storefront) is one of the largest costs for retailers and restaurants, and Sales per square foot measures how successful the company is at making money off of this key asset. Companies with low sales per square foot have less cushion to cover their expenses, and their business model may not make the best use possible of their retail space.
