Apple Retail Stores Outperform Tiffany’s, Best Buy

December 25th, 2006 at 2:00 PM - News by John Martellaro

Apple Computer has higher sales per square foot at its retail stores than Best Buy, Neiman Marcus, and even Tiffany & Co, according to a report released by Bernstein Research last Tuesday. Performance per square foot is one of the most important metrics in evaluating a retail chainis success. The report provided the numbers per square foot per year.

• Apple: US$4032
• Tiffany: US$2666
• Best Buy: US$930
• Neiman Marcus: US$611

The report cited Appleis better selection of location and better design aesthetics in the store compared to the competition. In addition, Apple has concentrated on premium products rather than cut-throat competition with PC manufacturers on very slim profit margins. As a result Apple earns an average of $23M in annual sales per store compared historically to Gatewayis US$8M per store. Those Gateway stores are now all closed. Part of Appleis success was attributed to the fact that Apple customers can walk out of the store with the product; at Gateway they could not.

The report concluded that Appleis keys to retail success have been location, location, location. Design a great store, appeal to the impulse buyer, and maximize the revenue per square foot.

Apple has about 170 stores worldwide with about 150 of those in the U.S.