Sales per square foot is the store's average revenue for every foot of sales space.
Sales per square foot determines how efficient the store space is being used. This is particularly important after a change in the store layout. It can also be used to conduct multi-location analysis and to determine whether rent paid at various stores are worthy. It is only reasonable to pay a higher rent for a location, if the store there has higher sales per square foot than other stores.
Larger retail stores can separate the whole store into different sections and use this metric to analyze the sales efficiency of each section.