Hicksville, N.Y.—When it comes to judging the success of a retail business, most people look at the operation’s annual sales as the measuring stick. But, the fact is, the most valued thing in a store is real estate. In other words, every square foot of your store needs to be productive. So, if you are not maximizing every square foot of your business in both volume and gross margin, your store is not as successful as it can and should be. In an effort to help retailers better understand the relationship between square-foot productivity and a business’ overall profitability, FCNews is presenting the third installment of a proprietary research project which focused on this particular subject.

Previous issues have already covered square foot productivity with regard to laminate flooring (FCNews, May 27/June 3) and resilient flooring (FCNews, June 24/July 1). This issue we present the results of the hardwood category, which was found to rank among the best in both gross margin and volume, and is especially higher than the average square foot productivity of a total store. As with the first two parts of the study, we looked at a sampling of average store sizes and what their hardwood operation should be producing in annual sales as a ratio to their overall business. To best use the information with regard to your own operation, you will need to know your business’ total volume, total gross margin, total square footage and square footage devoted to each product segment. To help retailers better understand the information and translate it to their businesses, we broke the data down to a two vendor and three vendor scenario. So, if a dealer has three wood suppliers which take up a total of 117 square feet of floor space, the final dollar amount translates to the productivity per square foot of those three vendors. Likewise, if a retailer has two wood suppliers taking up a total of 78 square feet of floor space, the final numbers show the productivity per square foot of those two suppliers.