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Benchmark yourself against Sainsbury

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 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.

But Sainsbury 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 is the new products were generating sales in a way that maintains your profitability  in the medium term and your popularity with shoppers.

A second benchmark that Sainsbury 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 good achievement. On your £8,000 per week that is £14,560 a year. On £20,000 it is £36,400. In the cased of Sainsbury, operating profit is calculated after staff costs.

PS: On the back of a fag packet, the c-stores appear to be operating at around £21.38 per square foot a week. In the report,  Justin King suggests that the market is open for consolidation, which is why it is opening more stores.

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