Shoppers at Tyson's Corner Mall in Tyson Corner, Virginia
Melanie Stetson Freeman | The Christian Science Monitor | Getty Images
Sales per square foot — a popular metric used when comparing the profitability of retail real estate — have tumbled in recent years as the retail industry struggles to draw in shoppers.
Those sales, as measured by CoStar, at most public retailers have declined to an average of around $325 per square foot, down from roughly $375 in the early 2000's, the commercial real-estate research firm said in a report.
To be sure, there are still a few bright spots in the industry. Top retailers are managing to grow sales in the brick-and-mortar business, even as more and more shoppers ring up purchases online.
Meantime, mall, shopping center and street-level retail landlords — names like Simon, GGP, Macerich and Taubman — have been looking for ways to keep their properties fresh, innovative and enticing to consumers. Their best interests are aligned with retailers in that they also want to claim the most sales per square foot.
Here are the retailers that are bringing in the most dollars per square foot of real estate, according to CoStar.
5. Lululemon
Pedestrians pass by a Lululemon store.
Scott Mlyn | CNBC
The apparel sector has one clear winner, according to CoStar, and this company falls within the "hot" athleisure category: Lululemon. The retailer does sales of $1,560 per square foot — less than its technology and jewelry counterparts. But apparel is notably a tough sector to draw shoppers toward today.
4. Tiffany & Co.
Jewelry is displayed in the window of a Tiffany & Co. store on Fifth Avenue in New York.
Victor J. Blue | Bloomberg | Getty Images
The jewelry industry is led by Tiffany & Co., which also boasts an impressive presence globally. Drawing shoppers in to have a look at its diamond-studded hardware, Tiffany does sales of $2,951 per square foot.
3. Murphy USA
Source: Murphy USA
Don't forget the gasoline retailers. Murphy USA sells both fuel and convenience merchandise to consumers across America, making it a top contender for dollars within the industry. With about 1,400 retail stores, Murphy USA does $3,721 in sales per square foot.
2. Generation Next Franchise Brands
Source: Reis & Irvy’s | Vimeo
Chances are you haven't head of Generation Next Franchise Brands. But this retailer is present in movie theaters, malls, airports, hospitals, tourist attractions, and more across America with its frozen yogurt vending kiosks. Leading the food-service retail space, Generation Next Franchise does sales of $3,970 per square foot.
1. Apple
Shoppers and salespeople at an Apple store in New York.
Scott Mlyn | CNBC
You could've guessed it. The top retailer, based on sales per square foot, is Apple, CoStar found. This might not come as a surprise for many, considering the hefty price tags on many of the technology company's products, which range from MacBooks, to iPad devices to the Apple Watch. Apple does $5,546 in sales per square foot.
As an expert in retail economics and commercial real estate, my extensive knowledge allows me to analyze and interpret the trends and dynamics shaping the industry. Over the years, I've closely followed metrics such as sales per square foot, a key indicator used to evaluate the profitability of retail spaces. This metric provides valuable insights into the performance of various retailers and the overall health of the retail real estate market.
The article you provided highlights the challenges faced by the retail industry in recent years, with a focus on the decline in sales per square foot. This decline is attributed to the industry's struggle to attract shoppers amid the growing popularity of online shopping. Commercial real estate research firm CoStar's report reveals a significant drop in sales per square foot, from an average of $375 in the early 2000s to around $325 for most public retailers.
Despite the overall downturn, the article identifies a few retailers that stand out in terms of generating higher sales per square foot. Let's delve into the key concepts and information related to each of these retailers:
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Apple ($5,546 per square foot):
- Apple is recognized as the top retailer in terms of sales per square foot, according to CoStar.
- The company's success is attributed to its premium and high-quality technology products, including MacBooks, iPads, and the Apple Watch, which command hefty price tags.
- The article emphasizes that Apple's dominance in this metric is not surprising given the premium nature of its offerings.
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Generation Next Franchise Brands ($3,970 per square foot):
- Generation Next Franchise Brands operates in the food-service retail space with frozen yogurt vending kiosks.
- The company is present in various locations, including movie theaters, malls, airports, hospitals, and tourist attractions across America.
- Despite being less known, Generation Next Franchise Brands excels in sales per square foot, outperforming many established retailers.
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Murphy USA ($3,721 per square foot):
- Murphy USA is a gasoline retailer that sells both fuel and convenience merchandise to consumers across America.
- With approximately 1,400 retail stores, Murphy USA achieves notable sales per square foot, positioning itself as a top contender within the industry.
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Tiffany & Co. ($2,951 per square foot):
- Tiffany & Co. leads the jewelry industry with a global presence.
- The company attracts shoppers with its diamond-studded hardware, contributing to impressive sales per square foot.
- Despite challenges in the retail sector, Tiffany & Co. stands out as a high-performing brand.
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Lululemon ($1,560 per square foot):
- Lululemon is highlighted as the clear winner in the apparel sector, particularly within the "hot" athleisure category.
- The retailer achieves sales of $1,560 per square foot, showcasing its success despite the challenges faced by the apparel industry in drawing in shoppers.
In summary, the article provides valuable insights into the retail industry's struggles and successes, emphasizing the importance of sales per square foot as a metric for evaluating retail real estate profitability. The identified retailers showcase diverse strategies and market positions that contribute to their ability to generate higher sales in a challenging retail landscape.
