Read through Sainsbury’s annual report and you can find some good statistics to use in checking how your shop or shops is/are doing.
One figure I like is measuring sales per square foot. For Sainsbury’s in 2010/11 it was £20.04 (including VAT, for which is has made adjustments). If you have a 400 square foot shop, then you would need to be selling just more than £8,000 a week to match them. A thousand square feet and it is just more than £20,000.
How you compare
Sainsbury’s achieve £20.04 in sales per square foot. To match this you would need:
- 400 sq ft: £8k/week turnover
- 1000 sq ft: £20k/week turnover
But Sainsbury’s also publishes its figures for the past five years that show it has moved from £19.30 up to a peak of £20.42 in 2009/10. Meaning its sales fell by 1.9 per cent in the latest year but are up by 5.8 per cent across five years.
But remember, this is an average across 934 outlets in the latest year and 788 five years ago so its best shops will be doing much better. And its worst…perhaps they will be on the market? At the same time its sales area has risen by 21.6 per cent to just more than 19.1 million square feet.
Obviously, it has invested in a lot of new space and has improved the sales it generates from each extra square foot of space. If you expanded your 400 square foot shop to say 800 square feet then you can use this benchmark to check if the new products are generating sales in a way that maintains your profitability in the medium term and your popularity with shoppers.
Underlying profit margin
A second benchmark that Sainsbury’s publishes is the underlying operating profit margin from its retailing activities, which was 3.5 per cent in the latest year. This has risen from 2.5 per cent in 2006/07, which is a great achievement.